Tax Tips: A Practical Checklist of Planning Moves to Consider

Tip 1: Fund tax-advantaged accounts first

The biggest tax break most people miss is simply funding tax-advantaged accounts up to the annual limit. For 2026, the IRS lets you contribute up to $24,500 to a 401(k), plus an $8,000 catch-up at age 50 or older. Traditional 401(k) contributions lower your taxable income today.

IRAs offer a smaller but useful boost. The 2026 IRA contribution limit is $7,500, with a $1,100 catch-up at age 50 or older. Use our 401k calculator and Roth IRA calculator to see how each choice grows over time. Always contribute enough to your 401(k) to capture the full employer match first, because that is a 100% return that you cannot get anywhere else.

Tip 2: Use an HSA for the triple tax break

A Health Savings Account (HSA) is the only account that offers a triple tax advantage. IRS Publication 969 confirms all three: contributions are tax-deductible, growth is tax-free, and qualified medical withdrawals are tax-free. You need a high-deductible health plan to qualify.

For 2026, the IRS lets you contribute up to $4,400 for self-only coverage and $8,750 for family coverage. Many people miss the biggest opportunity by spending the HSA balance right away instead of investing it. If you can pay medical bills from other cash, let the HSA grow, then withdraw for those past expenses years later, tax-free.

Tip 3: Consider tax-loss harvesting each fall

Tax-loss harvesting means selling investments at a loss to offset gains and reduce your tax bill. The IRS lets you use realized losses to cancel out realized capital gains dollar for dollar. Any extra loss can offset up to $3,000 of ordinary income each year, and any remainder carries forward to future years.

Watch the wash-sale rule. If you buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed. Review your taxable brokerage account each November, not just in December, so you have time to act without rushing.

Tip 4: Watch your bracket transitions

The federal income tax uses marginal brackets, which means only the income above each threshold is taxed at that bracket's rate. This is not the same as your average tax rate. Understanding the difference helps you plan year-end income and deductions.

A small change can matter near a bracket edge. Timing a Roth conversion, a bonus, or a large deduction can keep you in a lower bracket. If you are near a threshold, delaying $5,000 of income or accelerating a deduction can save real money. Our high-yield savings calculator helps you plan year-end cash moves.

Tip 5: Standard versus itemized deduction

Most filers now take the standard deduction because it is larger than their itemized total. You should itemize only when your qualifying deductions exceed the standard amount. Common itemized items include state and local taxes (capped at $10,000), mortgage interest, and charitable gifts.

One planning move: bunching. If your itemized total is close to the standard, group two years of charitable gifts into one year to clear the threshold, then take the standard next year. A donor-advised fund can hold the gift now and distribute it over time. Check the current standard deduction on IRS.gov before you plan.

Already behind on taxes? Here are your options →

The tips above are proactive planning — they work if you're current on filing and payments. If you already owe back taxes, the IRS has statutory relief programs the public rarely hears about: Offer in Compromise settles the debt for less than owed, an installment agreement spreads it over 72+ months and cuts the failure-to-pay penalty in half, Currently Not Collectible suspends collection during hardship, First Time Abate wipes penalties, and the 10-year Collection Statute Expiration Date under IRC §6502(a)(1) writes off what isn't collected in time. Our tax resolution calculator maps your specific situation to the right program, and the back taxes impact calculator shows the mortgage, passport, and credit consequences of leaving it unaddressed.

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