What the 2025 Tax Season Taught Me About Smarter Wealth + Tax Strategy for 2026
Another tax season is almost behind us. And honestly? The same patterns show up every year.
Most people do not have a tax problem. They have a planning problem.
As an Enrolled Agent reviewing real tax returns from high earners, executives, business owners, and families with growing complexity, I get a close look at where money leaks out. Not because people are careless. Not because they are not smart. But because tax moves, investment moves, and life planning decisions are too often made in separate silos.
So here is what the 2025 filing season taught me, and how I believe high earners should be planning for 2026.
Taxable Investment Accounts: Great Returns, Bad Tax Outcomes
One of the biggest patterns I saw was simple: people made good money in their taxable accounts, then gave away more of it than necessary in taxes.
In many cases, appreciated positions were sold without looking at holding periods, offsetting losses, projected income, or whether there was a more tax-smart source of cash. That can turn a strong market year into a painful tax year.
For high earners, this matters even more. A short-term gain may be taxed at ordinary income rates. A long-term gain usually gets better treatment. Timing alone can make a huge difference.
This is why I believe your investment strategy should never live apart from your tax strategy. When we help clients with taxable accounts, we look at the whole picture: gains, losses, expected income, cash needs, giving goals, and future bracket exposure.
If your portfolio has appreciated positions and you may need cash, do not wait until year-end to ask what the tax impact will be. That question should be asked before you sell, not after. And there are often other ways to access funding, without having to sell your positions at all.
Philanthropy: Good Intentions, Missed Opportunities
I also saw many generous people whose giving did little or nothing for their tax return because the gifts were not structured strategically.
That usually looks like this: multiple small donations throughout the year, no bunching strategy, no donor-advised fund, and no review of whether itemizing still makes sense.
For high-net-worth families, philanthropy can do far more than support important causes. It can reduce concentrated stock risk, improve deduction timing, help with family legacy conversations, and support multi-year tax planning. For more info, refer to my recent blog Go Big or Go Home: Why 2025 Is the Year to Supercharge Your Charitable Giving, where I explain why bunching gifts and using a donor-advised fund can be especially impactful for your own situation.
Healthcare Costs: The Quiet Financial Risk
Another lesson from tax season: health costs are one of the easiest ways for wealth to erode quietly in the background.
Even when medical expenses are high, the tax benefit is often limited. And for high earners, the threshold for deductibility can be hard to clear. That means many families are paying large out-of-pocket costs with little or no federal tax relief.
So yes, health is personal. But it is also financial. Preventive care, fitness, and thoughtful healthcare planning are part of wealth management. The healthier you stay, the more flexibility you preserve.
Further, strategic use of Health Savings Accounts (when available) combined with other insurance solutions can help with the tax-bite of medical expenses.
Long-Term Care: The Biggest Blind Spot
This is one of the most expensive planning gaps I see. Long-term care costs can be enormous. And because women tend to live longer, this planning issue often matters even more for them.
A long-term care plan does not have to mean only one thing. It can involve insurance, designated assets, family planning conversations, and cash flow modeling. But it should be addressed before there is urgency. I’ve helped with many tax returns – and when I see large numbers in the 1099 LTC tax form (https://www.irs.gov/pub/irs-pdf/f1099ltc.pdf ) -- it makes me happy that those clients planned ahead – in most cases those payments made out of a long-term care policy are tax-free!
OBBBA and the New SALT Deduction Rules: What High Earners Should Do Now
Now let us talk about the planning issue that should be on every high earner's radar going into 2026: how the OBBBA, changes the math around itemized deductions and the SALT deduction.
The OBBBA was signed into law on July 4, 2025. The IRS says the law significantly affects federal taxes, credits, and deductions, and the agency has already published 2026 inflation-adjusted figures that reflect OBBBA changes.
For 2026, the standard deduction rises to $32,200 for married couples filing jointly, $16,100 for single filers and married filing separately, and $24,150 for heads of household. That alone means many households will continue to need a strong reason to itemize.
At the same time, the IRS now says the deduction for state and local taxes, or SALT, is limited to a combined total deduction of $40,000, or $20,000 if married filing separately, subject to a modified adjusted gross income limitation but not reduced below $10,000.
So what does that mean in real life? It means the headline number may look generous, but not every high earner will actually get the full value. If your income is high enough, the MAGI-based limitation can shrink the benefit. And even when you do itemize, other deduction rules under OBBBA can reduce the value of those deductions going forward.
This is exactly why high-net-worth planning cannot be done on autopilot or with unintentional ignorance anymore. Tax strategies are getting harder and harder to keep up with year year, and implement – especially if the various parts of your financial lives function in silos, instead of like a well-oiled, coordinated machine.
What smart planning looks like now:
High earners should focus on five practical moves:
1️⃣ Run a projection before year-end. Do not guess whether itemizing will help. Model it and the plan accordingly. In many cases, we may use the standard deduction one year, and the itemized deduction the next.
2️⃣ Time charitable giving carefully. If giving will help you break through the standard deduction threshold in one year but not another, gift bunching in specific years should be considered.
3️⃣ Revisit estimated taxes and withholding. A higher SALT cap does not mean you should overpay state tax without a reason. Cash flow still matters. And it should NOT be a goal to get a large tax refund – but rather get as close to owing ZERO or getting a small refund. We want to use your cash flow proactively throughout the year, instead of lending your money interest free to the government.
4️⃣ Coordinate investment sales, Roth conversions, and deductions together. Income timing affects the value of deductions.
5️⃣ Review entity-level and state-specific strategies with your CPA and advisor together. Federal rules changed, but your business and state tax landscapes still matter.
Read this for more info on OBBBA: What do I need to know about the One Big Beautiful Bill Act Changes and How it Impacts Me.
For more ideas on long-term asset optimization and tax minimization strategies to consider, refer to 10 Year-End Tax Moves Every High Earner Should Make as well as A New Year Reset: Personal Reflections and Smarter Wealth + Tax Moves for 2026.
The Big Pattern: Reactive Planning Is Expensive
The people who had the best outcomes were not the people who got lucky. They were the people who stayed engaged all year.
They asked better questions sooner. They reviewed gains before selling. They coordinated giving before December. They thought about long-term care before there was a crisis. And they ran tax projections before making large moves.
That is the real lesson from tax season. Reactive planning is expensive. Proactive planning gives you options.
The best clients to work with come tax time are those who are MOST organized.
1️⃣ They complete the tax organizer each year (you know, the doc your CPA sends you each year and that most people ignore?)
2️⃣ Business owners who work with bookkeepers – or keep organized books – our preference is those using QuickBooks online. We do not have time to guess at your expenses – which means you may miss deductions.
3️⃣ Personal docs kept in good order.
4️⃣ Questions listed up front.
5️⃣ Are you planning on making SoloK, SEP IRA, or IRA contributions prior to filing? Let us know in advance so we can plan for that.
Your next step:
If you are a high earner and you want a smarter 2026 tax picture, schedule a mid-year strategy review now. We can look at your income, deductions, taxable accounts, charitable goals, and long-term planning gaps before the year gets away from you.
Schedule your strategy session and let’s find the moves that still matter before year-end.
And as always, this information should not be construed as personal advice for readers. Always consult with your wealth and tax professionals.