Top 3 Tax Strategies for Personal Taxes in 2026 You Shouldn’t Miss

Tax season often brings stress and confusion, especially when you want to make sure you’re paying the right amount and not missing out on savings. With 2026 just around the corner, it’s smart to plan ahead and use effective strategies to reduce your tax burden. Personal taxes can feel complicated, but with the right approach, you can keep more of your hard-earned money. Here are the top three tax strategies you should consider for your personal taxes in 2026.

Organizing tax documents for personal tax preparation

1. Maximize Retirement Contributions

One of the most powerful ways to reduce your taxable income is by contributing to retirement accounts. In 2026, the IRS has increased contribution limits for many retirement plans, giving you more room to save and lower your tax bill.

• 401(k) and 403(b) plans: You can contribute up to $23,000 if you’re under 50, and up to $30,500 if you’re 50 or older, thanks to catch-up contributions. These contributions reduce your taxable income because they are made pre-tax.

• Traditional IRA: You can contribute up to $7,000 in 2026, with an additional $1,000 catch-up contribution if you’re 50 or older. Contributions may be tax-deductible depending on your income and participation in other retirement plans.

• Health Savings Account (HSA): If you have a high-deductible health plan, contributing to an HSA can reduce your taxable income. The 2026 contribution limits are $4,150 for individuals and $8,300 for families, with an extra $1,000 catch-up for those 55 and older.

  
  

Example:

If you contribute the maximum $23,000 to your 401(k) and $7,000 to a traditional IRA, you could reduce your taxable income by $30,000. For someone in the 22% tax bracket, that means saving $6,600 in federal taxes.

2. Take Advantage of Tax Credits

Tax credits directly reduce the amount of tax you owe, making them more valuable than deductions. In 2026, several credits remain available or have been expanded, so it’s important to know which ones you qualify for.

• Child Tax Credit: This credit offers up to $2,000 per qualifying child under 17. The credit phases out at higher income levels, but many families still benefit.

• Earned Income Tax Credit (EITC): Designed for low to moderate-income workers, this credit can be worth thousands depending on your income and family size.

• Energy-efficient home improvements: If you make qualifying upgrades like solar panels or energy-efficient windows, you may be eligible for credits that cover a portion of the cost.

• Education credits: The American Opportunity Credit and Lifetime Learning Credit help offset the cost of college tuition and related expenses.

  
  

Example:

A family with two children might claim $4,000 from the Child Tax Credit. If they also installed solar panels costing $10,000, they could receive a credit of up to 30% of that cost, or $3,000, reducing their tax bill by $7,000 total.

3. Use Itemized Deductions Wisely

While the standard deduction has increased over the years, itemizing deductions can still save you money if your deductible expenses exceed the standard amount. In 2026, consider these common itemized deductions:

• Mortgage interest: Interest paid on mortgages up to $750,000 is deductible.

• State and local taxes (SALT): You can deduct up to $40,000 in combined state and local property, income, or sales taxes. The SALT deduction limit for 2025 has been increased to $40,000 for single and married filing jointly filers, up from $10,000 in 2024. This limit applies to state and local income taxes and property taxes. The cap will phase out for high-income taxpayers with modified adjusted gross income exceeding $500,000. After reaching this threshold, the deduction will revert to $10,000.

• Charitable donations: In 2025, significant changes to tax laws will impact charitable contributions, New Tax Provisions for Charitable Contributions. Above-the-Line Deduction for Non-Itemizers: Starting in 2025, taxpayers who do not itemize their deductions will be able to deduct cash donations to qualifying charities. This deduction is capped at $1,000 for single filers and $2,000 for married couples filing jointly. This change aims to encourage charitable giving among those who typically take the standard deduction, which has limited the tax benefits of donations for many taxpayers.

• Medical expenses: You can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.

  
  

The standard deduction for 2025 varies by filing status:

• Single filers: $15,750

• Married filing jointly: $31,500

• Married filing separately: $15,750

• Head of household: $23,625

• Qualifying surviving spouse: $31,500

Additionally, individuals aged 65 or older can claim an extra deduction of $2,000 for single and head of household filers, and $1,600 for married filing jointly filers.

Planning your personal taxes with these strategies can make a significant difference in your financial health. By maximizing retirement contributions, using tax credits, and choosing the right deductions, you can lower your tax bill and keep more money in your pocket.

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