Financial planning—for retirement, health care, and beyond—may offer tax-saving strategies to help trim what you owe.
You work hard for your money—so it makes sense to find ways to keep more of it. How much you owe in taxes depends on factors like how you file, your income, and your goals for the year ahead. These nine strategies can help you make the most of your money in the coming year.
Take time throughout the year to organize your tax-related records and make sure you have a tax-filing method you trust. The consequences of filing late or not requesting an extension by April 15, 2026, may be a hefty fine. State tax filing deadlines vary, so check with your state’s department of revenue.
Traditional IRA and 401(k) or 403(b) contributions are typically made with pre-tax dollars, so adding to these accounts can result in tax savings by reducing your taxable income. In 2026, contribution limits for each type of account are:
- 401(k) and 403(b): $24,500
- IRA: $7,500
Individuals age 50 and older can also make catch-up contributions, which increased for 2026:
- 401(k) catch-up: $8,000
- IRA catch-up: $1,100
For those age 60–63, the super catch-up contribution remains unchanged for 2026 at $11,250.
Two tax terms you should know
Tax deduction: reduces the total income your taxes are based on
- Example: $50,000 taxable income – $2,000 tax deduction = $48,000 new taxable income
Tax credit: reduces the total income tax you owe
- Example: $10,000 owed in federal income tax – $2,000 tax credit = $8,000 new total owed
529 plans offer potential tax savings in two ways: Earnings are tax-deferred while invested and money you use for qualified educational expenses isn’t taxed. Those 529 contributions may also qualify for state income tax deductions or credits.
If you’re on a high-deductible health plan (HDHP) through your employer, you may have access to an HSA to save for out-of-pocket medical expenses. For 2026, you’re able to contribute $4,400 to an HSA, and those funds are tax-advantaged in three ways:
- payroll HSA deductions are pre-tax (which lowers your taxable income)
- growth is tax-free
- withdrawals for qualified medical expenses aren’t taxed
If you know you’ll have expenses such as childcare, elder care, medical expenses, or prescriptions, pre-tax FSA savings (through an employer) help you plan your budget and lower taxable income. The IRS-allowed max savings changes every year (for 2026, the limits increased to $3,400), and you lose what you don’t use from year to year, so check current IRS contribution guidelines for details. (Typically, an FSA is not available if you are using an HSA.)
The biggest reward of giving is helping others—but your donations may also offer tax advantages. That includes something called bunching, which allows you to “bunch” several years of charitable giving in just one tax year. There is a new threshold for charitable giving deductions and you must itemize, so a check in with a tax professional or financial professional.
If you’re over 70½, you can make what’s called a qualified charitable distribution, or QCD. A QCD is a transfer of funds directly from an IRA to charity. That may lower your adjusted gross income which, in turn, could potentially put you in a lower federal tax income bracket and avoid the new adjusted gross income cap on charitable deductions. There are limitations (check with the IRS or your tax advisor).
The average tax refund in 2024
There are a variety of tax credits and deductions to take a close look at; some are new and a result of passage of H.R. 1 (known as the One Big Beautiful Bill Act) while others have been expanded. They include:
- An increased standard deduction: Make sure to claim the full amount of $32,200 for married couples filing jointly, $16,100 for single taxpayers, and $24,150 for heads of households.
- A new tax deduction for seniors: Those tax filers age 65 and older receive an additional $6,000 deduction through tax year 2028. However, it phases out above certain modified adjusted gross income levels. Read more about specifics of the age deduction.
- An expanded child tax credit: Your dependents must be under the age of 17 at the end of the calendar year.
- New car loan interest: If you made a new car purchase in 2025, up to $10,000 of interest may be deductible. There are both phase out income limits and manufacturing restrictions.
- Some of your home mortgage interest and home property taxes: There are limits, and you must itemize to claim these.
- Home energy efficiency improvements and electric-vehicle purchases: The former are only claimable until December 31, 2025, and the latter only for purchases made before September 30, 2025.
A tax professional can help you evaluate your options.
As a reminder: When you sell something you own, like an investment or a piece of artwork, for more than you paid, that profit is called a capital gain. How much you’ll owe in taxes depends on how long you held the asset and your tax filing status. One way to help balance those gains is through tax-loss harvesting, which means selling investments at a loss to help offset the taxes you owe on gains. However, it’s complicated, and there are multiple rules and considerations. A tax advisor and financial professional can help.
What’s next?
Ready to check your retirement account contributions to help lower your taxable income? Log in to your account and adjust your contributions. First time logging in? Get started by creating an account. Or, consider an individual retirement account if you don’t have retirement savings at work.
