2026 Year-End Tax Planning: 5 Tips for Individual Clients

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Standard deduction or itemize: decide with the 2026 numbers
The $6,000 senior deduction (2025 through 2028)
Charitable giving: three routes in 2026
The SALT cap: $40,400 for 2026, with a phasedown
Retirement contributions: the deadline depends on the plan
Running the review with Planning mode
Frequently asked questions

A year-end review of individual clients comes down to three questions: which rules changed, which clients each change affects, and what to tell them before December 31. This year there is more to check than usual. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) made the larger standard deduction permanent, added a deduction for clients 65 and older, set a minimum below which charitable gifts earn no deduction, reduced the value of itemized deductions for clients in the top bracket, and raised the state and local tax cap to $40,400. Most of these took effect for 2025, and 2026 is the first year their inflation-adjusted figures apply.

This is Part 1 of a series we are publishing over the next few weeks alongside the launch of Planning mode in the Partnertax AI Tax Assistant. It covers five tips for individual clients.

01Standard deduction or itemize: decide with the 2026 numbers

The first decision on every individual return is whether itemized deductions beat the standard deduction. Rev. Proc. 2025-32 sets the 2026 amounts, and they are high enough that most clients will not itemize:

Filing status	2026 standard deduction
Single, or married filing separately	$16,100
Head of household	$24,150
Married filing jointly, or surviving spouse	$32,200
Additional amount, age 65 or older or blind	$1,650 per condition ($2,050 if unmarried and not a surviving spouse)

Two things changed for clients who itemize. First, clients in the 37% bracket no longer get the full value of their itemized deductions. Under §68, a slice of those deductions is taken away, sized so that each dollar of deductions in the top bracket saves 35 cents of tax instead of 37. The rule was switched off from 2018 through 2025, and the 2025 law brought it back in this simpler form. Second, the 0.5% charitable minimum and the SALT cap discussed below both reduce what counts.

Ask Planning mode: "Married filing jointly client, both under 65. Mortgage interest $14,000, property tax $9,000, state income tax $11,000, charitable gifts $6,000. Should they itemize for 2026, and what changes if they move next year's gifts into this year?"

02The $6,000 senior deduction (2025 through 2028)

New §151(d)(5)(C) allows a $6,000 deduction for each taxpayer who is 65 or older by the end of the year, for tax years 2025 through 2028. On a joint return where both spouses qualify, that is $12,000. It sits on top of the existing additional standard deduction for age, and it is available whether or not the client itemizes.

The catch is the phaseout. The $6,000 shrinks by 6 cents for every dollar of modified adjusted gross income (MAGI, which for most clients is simply AGI) above $75,000, or $150,000 on a joint return. It is gone entirely at $175,000 of MAGI for a single filer and at $250,000 for a couple where both spouses qualify. Two more conditions: the qualifying person's Social Security number must be on the return, and a married client must file jointly to claim it.

Ask Planning mode: "Client, 67, single, MAGI $92,000. How much of the senior deduction does she keep, and what happens if she puts $8,000 into a traditional IRA before year end?"

03Charitable giving: three routes in 2026

Charitable rules now depend on whether the client itemizes, and a client 70½ or older has a third route that is not a deduction at all. The three compare like this:

	Standard deduction client	Itemizing client	Gift direct from an IRA (age 70½ and older)
Rule	§170(p), new for 2026	§170(b)(1)(I) minimum, new for 2026	Qualified charitable distribution, unchanged
What the client gets	Deduction of up to $1,000 ($2,000 joint), on top of the standard deduction	Full giving is deductible, minus the first 0.5% of AGI	Nothing to deduct: the money never counts as income
What qualifies	Cash only, to a public charity	Cash, stock, property	Cash sent by the IRA custodian directly to the charity
What does not	Gifts to donor-advised funds or supporting organizations; non-cash gifts	Nothing is excluded, but the first 0.5% of AGI is lost each year	Gifts to donor-advised funds; gifts from a 401(k)
Cap	$1,000 / $2,000	60% of AGI for cash, 30% for appreciated property; excess carries forward five years	$111,000 per person in 2026
Top-bracket reduction (§68)	Does not apply	Applies: each dollar saves 35 cents, not 37	Does not apply

Tip

Which clients: Clients who take the standard deduction and give cash, clients who itemize but give a small amount compared with their income, and clients 70½ and older who have IRAs.

The 0.5% minimum applies once per year, so the fewer years a client gives in, the less is lost. A client who gives three years' worth in one year, through a donor-advised fund, loses the minimum once instead of three times and will usually itemize that year. In the other two years the client takes the standard deduction and can still deduct up to $1,000 or $2,000 of cash gifts under §170(p). Clients 70½ and older have a third option: a qualified charitable distribution, which sends money from an IRA straight to a charity (up to $111,000 in 2026 under Notice 2025-67). That money never counts as income, so the minimum and the MAGI-based phaseouts never see it.

Ask Planning mode: "Married filing jointly client, AGI $180,000, gives $8,000 a year and takes the standard deduction. Compare giving $8,000 this year with putting $24,000 into a donor-advised fund now and nothing for the next two years."

04The SALT cap: $40,400 for 2026, with a phasedown

The cap on state and local tax deductions in §164(b)(6) was $10,000 from 2018 through 2024. Under §164(b)(7) it is $40,000 for 2025, $40,400 for 2026, and rises 1% a year through 2029 before returning to $10,000 in 2030. Married clients filing separately get half.

The higher cap shrinks for high earners. For 2026 it is reduced by 30 cents for every dollar of MAGI above $505,000, but never below $10,000. A client at $550,000 has a cap of $26,900, and a client with $606,333 or more is back at the old $10,000.

Tip

Which clients: Clients who itemize, whose 2026 state and local taxes will come in under their cap, and whose MAGI is below $606,333. Clients at or above that figure are already at $10,000 and gain nothing from paying early.

Paying the fourth-quarter state estimated tax, or a property tax bill the county has already issued, before December 31 puts that deduction on the 2026 return. Two cautions. State and local taxes do not count under the alternative minimum tax, so check whether the client is exposed to AMT first. And for a client above the $606,333 line, paying early changes nothing. Clients who own a partnership or S corporation in a state with a pass-through entity tax have a separate way around the cap; see our state-by-state guide at partnertax.ai/resources/pass-through-entity-tax-elections-by-state.

Ask Planning mode: "Married filing jointly client, MAGI $520,000, state income tax withheld so far $28,000, property tax $9,500. What is their 2026 SALT cap, and does paying the January property tax bill in December change their tax?"

05Retirement contributions: the deadline depends on the plan

A contribution to a retirement plan made before its deadline reduces 2026 taxable income. Pre-tax contributions also reduce AGI, which is why this tip comes last: lower AGI protects the senior deduction, keeps a client under the SALT phasedown, and lowers exposure to the 3.8% net investment income tax. Notice 2025-67 sets the 2026 limits:

Plan	2026 limit	Deadline
401(k), 403(b), 457(b) deferrals	$24,500	Through payroll by December 31
Catch-up, age 50 and older	$8,000 on top	Through payroll by December 31
Catch-up, ages 60 through 63	$11,250 on top (in place of the $8,000)	Through payroll by December 31
Traditional or Roth IRA	$7,500, plus $1,100 at 50 and older	April 15, 2027
SIMPLE IRA deferrals	$17,000, plus $4,000 at 50 and older	December 31
SEP-IRA or solo 401(k), employer contribution	Up to $72,000 per person under §415(c)	Return due date, including extensions

Two rules change the advice this year. First, the extra catch-up contribution for a client who is 60, 61, 62 or 63 at year end is $11,250 instead of $8,000. Second, under §414(v)(7), a client who earned more than $150,000 in wages from the employer last year can make catch-up contributions only into a Roth account. Those dollars are still saved for retirement, but they no longer reduce 2026 income. If the employer's plan has no Roth option, that client cannot make a catch-up contribution at all this year.

Tip

Which clients: Employees who have not yet contributed the maximum, clients turning 50 or 60 through 63 this year, self-employed clients, and any client whose MAGI is inside one of the phaseouts above.

Payroll contributions are the time-sensitive item. A 401(k) contribution can only come out of a paycheck, so the client must change the deferral election with the employer in time for the remaining pay periods. Tell clients with wages above $150,000 now that their catch-up will be Roth, before they plan on using it to cut 2026 tax. Self-employed clients have more time: SEP and solo 401(k) employer contributions can be made up to the extended filing deadline. Decide the IRA alongside the 401(k): the deduction for a traditional IRA phases out between $81,000 and $91,000 of AGI for a single client covered by a workplace plan ($129,000 to $149,000 joint), and a larger 401(k) contribution can bring a client back under that range.

Ask Planning mode: "Client, 61, wages $180,000, deferred $15,000 so far this year. If she raises her deferral to the maximum including catch-up over the last four pay periods, what changes on her 2026 return, and which part must be Roth?"

06Running the review with Planning mode

In the Partnertax AI Tax Assistant, turn Planning on with the toggle beside the message box (it is in beta), give the client's facts, and ask the question. The answer calculates federal tax and savings from those facts, and lists the source behind each figure under the answer so you can check which rule it applied.

When an answer is the recommendation, Save plan turns it into a plan with a PDF to send the client. Each later save adds a version, so the December update sits next to the October one, and every plan opens from My plans. Running the same question for the next client means picking that client and asking again, without re-entering their details.

Part 2 covers business-owner clients: bonus depreciation, §179 expensing, qualified production property, research costs, the QBI thresholds, and the excess business loss limit. The rest of the series follows at a few days' interval.

FAQFrequently asked questions

What is the standard deduction for 2026?

$16,100 for single filers and married filing separately, $24,150 for heads of household, and $32,200 for married couples filing jointly and surviving spouses (Rev. Proc. 2025-32). Clients who are 65 or older or blind add $1,650 per condition, or $2,050 if unmarried and not a surviving spouse.

Who qualifies for the $6,000 senior deduction?

Any client who is 65 or older by the end of the tax year, for 2025 through 2028, under §151(d)(5)(C). On a joint return each qualifying spouse gets $6,000. The amount shrinks by 6% of modified adjusted gross income above $75,000 ($150,000 joint), a Social Security number is required, and a married client must file jointly to claim it.

Can a client deduct charitable gifts without itemizing in 2026?

Yes, up to $1,000 ($2,000 on a joint return) of cash gifts to public charities under §170(p), starting with tax years beginning after December 31, 2025. Gifts to donor-advised funds and supporting organizations do not count toward this deduction.

What is the SALT cap for 2026?

$40,400 ($20,200 married filing separately) under §164(b)(7). It rises 1% a year through 2029 and returns to $10,000 in 2030. The cap is reduced by 30% of modified adjusted gross income above $505,000, but never below $10,000.

What are the 2026 401(k) contribution limits?

$24,500 in elective deferrals, plus a catch-up of $8,000 at age 50 and older or $11,250 at ages 60 through 63 (Notice 2025-67). A client whose prior-year wages from the employer exceeded $150,000 can make catch-up contributions only as Roth.

Can I run the same Planning question across several clients?

Yes. A Planning chat starts from the client you pick, so the same question runs against each client's saved facts. Each client's plan saves separately, with its own PDF and version history.

Can I send the Planning PDF to a client?

Save plan produces a PDF of the answer with its figures and the sources behind them. It is your recommendation, so review it the way you would a staff memo before it goes out.