Tax Planning Strategies for 2026

1Save More for Retirement

Saving for retirement can help you build a better future and may lower your tax bill. In 2026, workers can put up to $24,500 into a 401(k). The yearly limit for a traditional or Roth IRA is $7,500. Income limits and other rules may apply.

Business owners can also look at plans such as a SEP IRA or a 401(k). The best plan depends on your income, business, and staff. Check the rules before you choose a plan.

2Check the New Tax Deductions

New tax rules for 2026 offer some workers more ways to cut their federal tax bill. Eligible workers may deduct up to $25,000 in tips and up to $12,500 in overtime pay. The overtime limit is $25,000 for married couples who file a joint return. Income limits and other rules apply.

People age 65 and older may also claim an extra deduction of up to $6,000 per person. Some car buyers may deduct up to $10,000 in interest on a loan for a car that meets the rules.

The 2026 standard deduction is $16,100 for single filers, $32,200 for married couples who file jointly, and $24,150 for heads of household. Check if the standard deduction gives you a bigger tax break than listing your own costs.

3Plan for Income From Investments

If you earn money from stocks, rental homes, or other investments, check how it may affect your taxes. Some people must pay a 3.8% Net Investment Income Tax based on their income and the type of money they earn.

You can review when to sell stocks and other assets. Selling an asset at a loss may also help lower tax on gains, if you follow the rules. Giving stocks or other assets to family members can affect their taxes, too. Check the tax rules before you sell or give away an asset.

4Keep Records of Work Trips and Meals

If you own a business, keep records of work trips, hotel stays, meals, and other costs. You may deduct some of these costs if they meet IRS rules. Business meals are usually limited to a 50% tax deduction. Business entertainment costs are usually not tax-deductible.

Keep your receipts and write down why each cost was for work. If you mix a work trip with a holiday, keep personal costs apart from work costs. Good records make tax time easier and help show why you claimed a deduction.

5Check Your Business Car Costs

If you use your car for work, you may be able to deduct some costs. You can use the standard mileage rate or the actual cost method.

For 2026, the IRS mileage rate is 72.5 cents per mile from January through June. It rises to 76 cents per mile from July through December.

The actual cost method may cover gas, repairs, insurance, and wear on the car. You cannot claim the same costs under both methods for the same use. Keep a record of your work miles, dates, and trip details.

6Hire a Family Member for Real Work

Hiring your spouse or another family member may help you run your business. They could help with books, calls, or daily tasks.

The person must do real work, and their pay must be fair for the job. You must also follow the payroll tax rules. Paying a family member does not always lower your tax bill, so check the costs first.

7Plan Gifts to Your Children

Giving money or property to your children can be part of your family plan. In 2026, you can usually give up to $19,000 per person each year without filing a gift tax return. Gifts above this amount may need to be reported, but that does not always mean you owe gift tax.

If you give stocks or other assets to your child, they may have to pay tax on the gain when they sell them. Special tax rules may also apply to a child’s income from investments. Check the rules before you give away assets.

8Review Your Business and Equipment Costs

Your business type affects how you pay taxes. Sole owners, partners, S corporations, and C corporations all follow different tax rules. Some business owners can claim a tax break of up to 20% of their qualified business income. This break was made permanent under the 2025 tax law, but income limits and other rules still apply.

You should also check the tax rules before buying new tools or gear for your business. Many eligible assets bought and put to use after January 19, 2025, may qualify for a full bonus depreciation deduction. This may let you deduct the full cost in the year you start using the asset. Not every item qualifies, so check before you buy.

9Plan When You Get Paid and Pay Bills

If you own a small business, keep track of your income, costs, and tax payments all year. The timing of income and costs may affect which tax year they count toward.

Keep receipts and check which costs you can deduct. Do not leave out income just to lower your tax bill. A clear plan can help you set money aside and avoid a surprise bill when you file.