Frequently Asked Questions

• The QBI deduction was made permanent and a new minimum deduction of $400 was added for businesses that generate at least $1,000 in aggregate QBI income
• 100% first year bonus depreciation was reintroduced and has a huge beneficial impact for heavy vehicles used over 50% for business 
• Increased the threshold for filing forms 1099-MISC and 1099-NEC from $600 per payee to $2,000

• SALT (state and local tax) deduction was increased from $10,000 to $40,000, reduced by 30% of MAGI over the threshold
• No tax on tips is a new deduction of up to $25,000 for individual taxpayers who receive qualified tips
• No tax on overtime is a new deduction of up to $12,500 ($25,000 MFJ) even if only one spouse receives overtime
• No tax on qualified car loan interest paid or accrued on vehicles purchased after December 31, 2024
• Personal exemption for seniors of up to $6,000 is available for taxpayers 65 and older 
• Charitable contribution deduction of up to $1,000, ($2,000 MFJ) is available for nonitemizers beginning with the 2026 taxable year 
• Trump Accounts is an IRA type account in which taxpayers can make an election on behalf of their eligible child to have $1,000 treated as a tax payment for the taxable year. The $1,000 will be deposited to the Trump account established on behalf of the child. Applicable to taxable years beginning after December 31, 2025 with special rules during the period when the beneficiary is under age 18. For more information go to https://trumpaccounts.gov/

One way to minimize your income tax liability is to maximize your pre-tax retirement contributions.

Key 2026 IRS contribution and catch-up limits: 

IRAs (Traditional & Roth)

• Base Contribution: $7,500
• Age 50+ Catch-up: +$1,100 Total $8,600

401(k), 403(b), & 457(b) Plans

• Employee Elective Deferrals: $24,500
• Standard Age 50–59 Catch-up: +$8,000
• Ages 60–63 "Super" Catch-up: +$11,250
• Total Employee + Employer Contributions: $72,000

SIMPLE IRAs & SIMPLE 401(k)s

• Employee Elective Deferral: $17,000 
• SECURE 2.0 Higher Deferral Limit (for specific plans): $18,100

SEP IRAs

• Contributions are made entirely by the employer (or by you, if you are self-employed)  
• Contribution limit is the lesser of 25% of the employee’s compensation or $72,000 

Other Plan Limits

• Defined Benefit Plan Maximum (Annual Benefit): $290,000
• Annual Compensation Limit: $360,000
• Highly Compensated Employee Income Limit: $360,000

Gifting appreciated stock is one way to shift the tax liability from a person with a high marginal tax rate to a person with a lower marginal tax. Typically, this takes place within the family unit, with parents shifting income to their children. Although, one must consider the kiddie tax provisions when gifting to their minor children.

The advantages include the following:

• The opportunity to acquire the investment with a relativity high degree of leverage; i.e. use of debt financing
• Certain tax benefits, to include tax depreciation

A disadvantage of real estate

• It's lack of easy marketability, meaning it can be difficult to quickly convert a real estate investment into cash, as compared to stocks and bonds

Successful investment in real estate involves consideration of many factors, including the following:

• Location of the property and it's expected appreciation over the anticipated holding period
• Degree and type of leverage
• Property and other relevant taxes
• Expected occupancy rate and cash flow

In 1983, Congress passed a law to gradually increase the full retirement age because people were living longer and generally heathier in older age. For example, full retirement age is 67 for people born in 1960 and later. If you decide to begin receiving Social Security benefits at age 62 your benefit will be reduced by 30%. The Social Security benefit increases approximately 8% for every year between 67 and 70 that you wait to claim. 

To estimate your benefit amount go to: https://www.ssa.gov/oact/quickcalc/