2026: New Year Planning Reminders

Another year has come and gone, and the New Year resolutions are in! With 2026 ahead of us, this is a good time to review our financial annual tasks to ensure that we are “tracking” on all planning matters.

Here is a checklist of the things to keep in mind as we enter the year:

Retirement Account Actions – Maximize Your Annual Contributions

Employer-Sponsored Plans (401(k), 403(b), Governmental 457, Thrift Savings Plan.)

• Employee Deferral election increases to $24,500.
• Catch-up contribution if you are 50 increased to an additional $8,000.
• For those people aged between 60-63, the Super Catch-up increased to $11,250.

Remember that starting this year, all catch-up contributions must be Roth if you earned $150,000 or more in wages in 2025.

Individual Retirement Accounts (IRAs – Traditional & Roth)

• Standard contribution increased to $7,500.
• Catch-up contribution if you are 50 increased to an additional $1,100, totaling $8,600 in retirement savings.

Remember to always account for the income limitations that prevent direct Roth contributions. These income limitations can also reduce the deductibility of the contributions made into Traditional IRAs.

Health Savings Accounts (HSAs)

• Self-only coverage increased to $4,400
• Family coverage increased to $8,750
• Catch-up contribution if you are 55 remained the same as last year, $1,000

Gifting & Estate Tax Matters – News and Updates

Gifts To Individuals

• This year’s annual exclusion remained the same as last year. Individuals can give up to $19,000 without tapping into their lifetime exemption.

Gifts To 529s

• Individuals are allowed to “superfund” 529 plans. In simple terms, super funding allows the donor to upfront up to 5 years’ worth of annual exemption gifts into a tax-advantaged investment account to help the recipient save for future education costs. This year, individuals can give $95,000 into a 529 plan without tapping into their lifetime exemption.

Lifetime Gift & Estate Tax Exemption

• The legislation introduced back in July 2025 confirmed that the estate and gift tax exemption increase is now permanent. Adjusted for inflation, this year, the amount is $15m per individual.
• This year may be a good time to review your family’s estate plan – there may be additional flexibility for an individual or couple to further reduce their estate tax liability by maximizing your lifetime exemption. If you are unsure of how much lifetime exemption you have left, please reach out to us to help.

Gifts to Charity

• The One Big Beautiful Bill Act (“OBBBA”) introduced limitations to itemized charitable deductions starting this year. For those aged 70 ½ that are charitably inclined, consider making your gifts to charity through your IRA. Qualified Charitable Distributions (QCDs) allow you to bypass the 0.5% AGI floor that OBBBA imposes. In 2026, each taxpayer can make up to $111,000 in QCDs. Any amount made via QCD will count towards your Required Minimum Distribution (RMD) if you are subject to it.

We stand ready to help you address any or all of the above.

Thank you for ‘gifting’ us another year of working with you!

Nirvanna Silva