By Jeff Weeks, CFP | ATX Portfolio Advisors | TexAgs
Football fans understand that the last few minutes can change the outcome. They also understand how frustrating it is to reach the end of the game with timeouts the coach never used. Some year-end financial planning opportunities work that way. Once December 31 passes, you can't simply ask for the clock back.
I am not suggesting you spend Thanksgiving debating the Internal Revenue Code. But before the holiday calendar takes over, I would spend a little time on the decisions that could affect your 2026 taxes and your family's longer-term plan. Charitable giving has some new wrinkles this year. Family gifts and retirement accounts deserve attention, too.
Your charitable gift may work differently this year
Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 of qualifying cash contributions to eligible charities, or $2,000 for married couples filing jointly. That particular deduction does not cover donations of stock or contributions to donor-advised funds. If you normally take the standard deduction, keep the records of your eligible cash donations. They may now have a tax benefit you would otherwise miss.
For people who itemize their tax deductions, a new 0.5% floor applies to charitable deductions. At $300,000 of adjusted gross income, the first $1,500 of contributions generally produces no charitable deduction. A $5,000 qualifying cash gift leaves $3,500 potentially deductible before other limits. I would run the numbers rather than assume the tax benefit is the same as last year.
One approach to consider is bunching several years of intended giving into one year. A donor-advised fund can help with timing, but contributions are irrevocable and fees matter. If you own appreciated stock that you have held for more than a year, donating the shares directly can be more tax advantageous than writing a check. Business interests, real estate, and certain other appreciated assets may also be candidates, but those gifts require additional planning and valuation work. The right approach depends on the asset, your tax return, and what you actually want to give.
And since some readers are also season ticket holders, a reminder: payments for the right to buy college athletic tickets are not deductible charitable gifts. A good seat can still be worth the money. Just keep it out of the charitable deduction column.
Charitable giving from your IRA
If you are at least 70, a qualified charitable distribution (QCD) allows money to move directly from an eligible IRA to a qualifying charity. The 2026 limit is $111,000 per eligible person, and the transfer can count toward an IRA required minimum distribution. You exclude the qualifying amount from taxable income instead of taking a separate charitable deduction. This can be useful even if you do not itemize.
The mechanics matter. A QCD cannot go to a donor-advised fund, and withdrawing money into your checking account first generally defeats the strategy. I would coordinate the gift before taking the rest of the year's required withdrawal. Give the custodian and charity enough time to finish the transaction.
Help the kids without shortchanging your own plan
For 2026, the annual gift-tax exclusion is $19,000 per donor, per recipient. Spouses can generally give $38,000 combined to as many individuals as they care to, when properly structured. Exceeding that amount may require a gift-tax return and use of lifetime exemption; it does not automatically mean gift tax is due.
A 529 contribution can help a child or grandchild with future education costs. Paying qualifying tuition directly to the school is another option with a separate gift-tax exclusion. Paying the student's rent or reimbursing a parent does not receive that same tuition exclusion. The check's destination matters.
The newer Trump accounts also deserve a look for eligible children, but their restrictions and gift-tax rules differ from a 529 plan. I would start with what the money is intended to accomplish and compare the accounts from there. And before funding any of them, make sure your own retirement plan can support the gift. There is no annual exclusion for financial regret.
Check the portfolio and retirement accounts together
Realizing investment losses may help offset capital gains from other sales. It can be especially useful when reducing a concentrated stock position or rebalancing. But watch the wash-sale rules: buying substantially identical securities within 30 days before or after the sale can disallow the loss. Automatic reinvestments and activity in other household accounts can matter.
A lower-income year may also create an opportunity for a Roth conversion. I would look at the immediate tax cost, future retirement income, cash available to pay the tax, and possible effects on Medicare premiums or other benefits. A conversion generally must be completed by December 31, and required minimum distributions cannot be converted. I frequently help evaluate this decision with a tax projection comparing the estimated tax consequences of converting versus leaving the money in the traditional IRA.
My short list before the holidays
Confirm any remaining required minimum distributions. Decide which charities and family members you intend to help, then choose the funding method. Review realized gains, available losses, and potential Roth conversions together. Check year-end payroll contributions, withholding, and beneficiary designations. Allow time for the transactions to finish. You do not need to execute every strategy on the list. I would focus on the ones that fit your household and coordinate them with your CPA and estate attorney as needed. If you would like help reviewing your plan, get in touch through the ATX Portfolio Advisors contact page: https://www.atxadvisors.com/contact.
Then you can start looking ahead to next year, with at least one plan that doesn't depend on the Aggies converting on fourth down.
Gig 'em.
Principal
jeff.weeks@atxadvisors.com
(512) 537-5955
www.atxadvisors.com
Football fans understand that the last few minutes can change the outcome. They also understand how frustrating it is to reach the end of the game with timeouts the coach never used. Some year-end financial planning opportunities work that way. Once December 31 passes, you can't simply ask for the clock back.
I am not suggesting you spend Thanksgiving debating the Internal Revenue Code. But before the holiday calendar takes over, I would spend a little time on the decisions that could affect your 2026 taxes and your family's longer-term plan. Charitable giving has some new wrinkles this year. Family gifts and retirement accounts deserve attention, too.
Your charitable gift may work differently this year
Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 of qualifying cash contributions to eligible charities, or $2,000 for married couples filing jointly. That particular deduction does not cover donations of stock or contributions to donor-advised funds. If you normally take the standard deduction, keep the records of your eligible cash donations. They may now have a tax benefit you would otherwise miss.
For people who itemize their tax deductions, a new 0.5% floor applies to charitable deductions. At $300,000 of adjusted gross income, the first $1,500 of contributions generally produces no charitable deduction. A $5,000 qualifying cash gift leaves $3,500 potentially deductible before other limits. I would run the numbers rather than assume the tax benefit is the same as last year.
One approach to consider is bunching several years of intended giving into one year. A donor-advised fund can help with timing, but contributions are irrevocable and fees matter. If you own appreciated stock that you have held for more than a year, donating the shares directly can be more tax advantageous than writing a check. Business interests, real estate, and certain other appreciated assets may also be candidates, but those gifts require additional planning and valuation work. The right approach depends on the asset, your tax return, and what you actually want to give.
And since some readers are also season ticket holders, a reminder: payments for the right to buy college athletic tickets are not deductible charitable gifts. A good seat can still be worth the money. Just keep it out of the charitable deduction column.
Charitable giving from your IRA
If you are at least 70, a qualified charitable distribution (QCD) allows money to move directly from an eligible IRA to a qualifying charity. The 2026 limit is $111,000 per eligible person, and the transfer can count toward an IRA required minimum distribution. You exclude the qualifying amount from taxable income instead of taking a separate charitable deduction. This can be useful even if you do not itemize.
The mechanics matter. A QCD cannot go to a donor-advised fund, and withdrawing money into your checking account first generally defeats the strategy. I would coordinate the gift before taking the rest of the year's required withdrawal. Give the custodian and charity enough time to finish the transaction.
Help the kids without shortchanging your own plan
For 2026, the annual gift-tax exclusion is $19,000 per donor, per recipient. Spouses can generally give $38,000 combined to as many individuals as they care to, when properly structured. Exceeding that amount may require a gift-tax return and use of lifetime exemption; it does not automatically mean gift tax is due.
A 529 contribution can help a child or grandchild with future education costs. Paying qualifying tuition directly to the school is another option with a separate gift-tax exclusion. Paying the student's rent or reimbursing a parent does not receive that same tuition exclusion. The check's destination matters.
The newer Trump accounts also deserve a look for eligible children, but their restrictions and gift-tax rules differ from a 529 plan. I would start with what the money is intended to accomplish and compare the accounts from there. And before funding any of them, make sure your own retirement plan can support the gift. There is no annual exclusion for financial regret.
Check the portfolio and retirement accounts together
Realizing investment losses may help offset capital gains from other sales. It can be especially useful when reducing a concentrated stock position or rebalancing. But watch the wash-sale rules: buying substantially identical securities within 30 days before or after the sale can disallow the loss. Automatic reinvestments and activity in other household accounts can matter.
A lower-income year may also create an opportunity for a Roth conversion. I would look at the immediate tax cost, future retirement income, cash available to pay the tax, and possible effects on Medicare premiums or other benefits. A conversion generally must be completed by December 31, and required minimum distributions cannot be converted. I frequently help evaluate this decision with a tax projection comparing the estimated tax consequences of converting versus leaving the money in the traditional IRA.
My short list before the holidays
Then you can start looking ahead to next year, with at least one plan that doesn't depend on the Aggies converting on fourth down.
Gig 'em.
Principal
jeff.weeks@atxadvisors.com
(512) 537-5955
www.atxadvisors.com