Advanced tax planning for high earners: what changed in 2026

If your tax planning still runs on assumptions from a few years ago, 2026 is the year to refresh them. This is the first full tax year shaped by the sweeping federal tax law passed in July 2025, and several provisions that high-income households planned around for nearly a decade have been made permanent, reshaped, or replaced outright.

The good news: mid-year is exactly the right time to act. Most of the strategies below only work if they are executed before December 31. By the time returns are filed in April, the options have already expired.

Start with the new landscape

A few 2026 numbers set the stage. The familiar seven-bracket rate structure, 10% through 37%, is now permanent, with the top rate applying above $640,600 of taxable income for single filers and $768,700 for married couples filing jointly. The standard deduction is $16,100 for single filers and $32,200 for joint filers.

Three changes deserve special attention from high earners:

• A bigger SALT deduction, with a hidden phase-out. The cap on state and local tax deductions rose to $40,400 in 2026 (from the long-standing $10,000), but it shrinks by 30 cents for every dollar of modified adjusted gross income above $505,000, with a $10,000 floor. Households with income between roughly $505,000 and $606,000 sit in what planners have started calling the SALT torpedo: in that corridor, each additional dollar is taxed and simultaneously erodes the deduction, so the effective marginal rate runs meaningfully higher than the stated bracket.
• A new senior deduction, with strings. Taxpayers age 65 and older can claim an additional deduction of up to $6,000 per person for 2025 through 2028, whether or not they itemize. It phases out once modified adjusted gross income exceeds $75,000 for single filers or $150,000 for joint filers, which means income-timing decisions now directly affect eligibility.
• A quietly tighter AMT. The alternative minimum tax exemption phase-out thresholds reset to $500,000 (single) and $1,000,000 (joint) for 2026, well below where they stood in 2025, and the phase-out rate doubled to 50%. If your compensation includes incentive stock options, an exercise that was AMT-safe last year may not be this year.

Roth conversions: fill brackets on purpose

For many households, the most valuable planning years are the ones between retirement and required minimum distributions, which currently begin at age 73. Income often dips in that window, and every dollar of unused lower tax bracket is an opportunity that expires each December 31.

A Roth conversion moves money from a traditional IRA to a Roth IRA, paying ordinary income tax now in exchange for tax-free growth, tax-free qualified withdrawals later, and no lifetime required distributions from the Roth. The classic approach is bracket-filling: converting just enough to use up a target bracket without spilling into the next one. In 2026, for example, the 24% bracket for joint filers extends to $403,550 of taxable income, a wide runway for a retired couple whose income has dropped.

Two cautions before converting. First, conversions have been irreversible since 2018; there is no undo if you overshoot, so the amount deserves real modeling rather than a year-end guess. Second, a conversion raises modified adjusted gross income, and MAGI is the trigger for several other provisions: Medicare's income-related premium surcharges (IRMAA), the new senior deduction phase-out, the SALT phase-down, and the 3.8% net investment income tax above $200,000 (single) or $250,000 (joint). IRMAA deserves particular respect because of its two-year lookback: 2026 income sets 2028 Medicare premiums, and the first surcharge tier begins at just $109,000 of MAGI for single filers and $218,000 for joint filers.

A hypothetical illustration: a married couple, both 66 and recently retired, project $150,000 of taxable income this year. They could convert roughly $250,000 and still remain inside the 24% bracket. Whether they should convert that much, or a fraction of it spread across several years, depends on their expected future brackets, Medicare timing, charitable plans, and what they intend to leave to heirs. The bracket math is the easy part; the coordination is the work.

Charitable giving has new math in 2026

Three charitable provisions took effect this year, and together they change how giving should be structured:

• A new floor for itemizers. Only charitable contributions exceeding 0.5% of adjusted gross income are deductible. On $600,000 of AGI, the first $3,000 of annual giving generates no deduction at all.
• A cap for top-bracket donors. Taxpayers in the 37% bracket now receive at most 35 cents of tax benefit per deductible dollar, rather than 37.
• A deduction for non-itemizers. Taxpayers who take the standard deduction can deduct up to $1,000 (single) or $2,000 (joint) of cash gifts to operating charities. Gifts to donor-advised funds do not qualify for this one.

The planning responses are straightforward. Bunching several years of intended gifts into a single year, often through a donor-advised fund, clears the 0.5% floor once instead of annually and can push a household over the itemizing threshold in the gift year. Giving appreciated long-term securities instead of cash generally allows a fair-market-value deduction, within AGI limits, while avoiding the embedded capital gain.

And for givers age 70½ or older, the qualified charitable distribution remains the cleanest tool of all. Up to $111,000 per person in 2026 can move directly from an IRA to charity without ever touching adjusted gross income. A QCD bypasses the new floor, bypasses the 35% cap, can count toward required minimum distributions at 73 and beyond, and helps keep MAGI below IRMAA thresholds. (QCDs cannot go to donor-advised funds or private foundations.)

Estate and gift: a bigger window, still worth using

The federal estate and gift tax exclusion rose to $15 million per person in 2026, $30 million for a married couple, and is now permanent and indexed for inflation. The annual gift exclusion remains $19,000 per recipient. A larger exemption reduces urgency for many families, but it does not replace fundamentals: current wills and powers of attorney, correct beneficiary designations on retirement accounts and insurance, and a clear plan for how heirs will actually receive assets. Those items decide outcomes far more often than the exemption amount does.

The bracket math is the easy part; the coordination is the work.

Pull it together before December

None of these strategies works in isolation. A single Roth conversion changes your IRMAA exposure, your SALT deduction, your senior-deduction eligibility, and the value of this year's charitable gifts, all at once. The households that get 2026 right will be the ones that model those interactions this fall, not the ones that discover them next April.

If you would like a second set of eyes on your 2026 tax picture, we're glad to help. Click here to schedule an introductory call with our team. 

Important disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Investing involves risk, including possible loss of principal. No strategy assures success or protects against loss.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

 Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA..