Listed are a few items you and your tax preparer may want to discuss.

Dear Clients and Friends:

2026 Tax and Investment Changes

Several new tax and investment changes will be effective in 2026. Listed below are a few items you and your tax preparer may want to discuss.

1. People taking the standard deduction will now be able to write off $2,000 (joint filers) in charitable giving.

2. Several tax benefits for child and dependent care have been enhanced, including a $7,500 contribution to dependent care flex spending accounts.

3. Tax credits for electric cars are generally gone.

4. Tax rates and income thresholds for capital gains have increased. Joint filers who make up to $98,900 in Joint taxable income will pay no capital gains taxes. $98,900 to $613,700 in income will generate a 15% rate and 20% rate will apply on capital gains for filers making $613,701 and above. Many clients think the 20% rate applies to all gains, but that is not necessarily the case.

5. Contribution dollar limits on 401k and IRAs are slightly higher in 2026.

6. New “Trump Accounts” will be available after July 4, 2026. Contributions of $5,000 annually can be made to children under age 18 and earnings will grow on a tax deferred basis. You should hear more about this as we get into the year.

With the passage of the “One Big Beautiful Bill” there are other changes for 2026. Please discuss the impact of these with your tax preparer.

Please contact us should you have any questions concerning these issues.

Sincerely,

Dean S. Mailhes, CFA

Justin Mailhes, CFP®, CKA®