5 Tax Planning Mistakes We See Heading Into 2026
The 2026 tax season is upon us, and we are here to help highlight some common tax planning mistakes you might encounter. It’s important to plan your taxes strategically to effectively navigate the complexities of taxation. Below is a list of five common misconceptions that you may want to reconsider this tax season.
Key Points – 5 Tax Planning Mistakes We See Heading Into 2026
- Not, thinking about taxes over your lifetime
- Procrastinating planning and execution
- Ignoring changing tax laws
- Not developing an overall financial plan
- Not discussing taxes and tax planning with your financial advisor
Having a shortsighted view of taxes
Many people’s first question about taxes is, “How can I minimize my tax payment this year?” While most are understandably concerned about this, focusing solely on short-term savings can be shortsighted.
Instead, your goal should be to strategize how to reduce your tax burden over your lifetime. This consideration is particularly important for pre-retirees, as required minimum distributions (RMDs) will become part of their taxable income at age 73. Another strategy a retiree can use to alleviate taxes is through qualified charitable distributions, but careful planning is necessary to make this effective.
Learn More: 6 Strategies to Consider this Tax Season
Procrastinating Your Taxes:
Don't wait until the last minute. We understand the wait, especially if you are new to taxes or simply busy. Allowing yourself sufficient time to plan and execute effective tax strategies is essential. But waiting until the last minute can delay important strategies and even make you miss out. Procrastinating only hurts your situation and can put you out of the running for key tax strategies. Start having tax discussions soon, giving yourself and your financial advisor time to develop and implement effective tax strategies.
Learn More: 5 Last Minute Tax-Tips
Ignoring tax law changes:
In 2026, there are some changes taking effect due to the Big Beautiful Bill that was passed in 2025. It’s important to understand these changes and how they might affect your tax bill and plan.
Don’t forget about the One Big Beautiful Bill Act that went into effect last year, as it could influence your federal taxes this year. Many of the changes implemented under this act include expanded tax brackets, increased deductions, and new credits aimed at maximizing refunds for taxpayers.
Tax Changes Include:
- Increased 401(k) and 457 contribution limits for 2026
- New “super catch-up" contributions for ages 60-63
- Mandatory Roth catch-ups for high-income earners over 50
- Higher standard deductions and temporary senior tax breaks
- 2026 tax law changes may affect Roth conversions and RMD planning
Additionally, individuals aged 65 and older can benefit from a new deduction, which permits an extra $6,000 deduction on any income, including taxable Social Security income. It's important to note that some Social Security benefits are taxable, so be sure to double-check your tax obligations.
Tax policies can change with different administrations and other influencing factors, so it’s important to stay informed. This knowledge will help you make the best decisions for yourself and your family.
Learn More: 2026 Tax Law Updates – What Retirees Need to Know
https://www.youtube.com/watch?v=7HgLMa-yUqg
Not developing an overall financial plan:
You cannot have a tax plan without financial planning. Moreover, you need an overall financial plan to know where you are, which will help you get to where you want to go.
A financial plan covers many aspects of your finances, helping you build your retirement, as well as tax planning.
- Income Planning – Keep in mind that your income is subject to taxes, and its sources will change in retirement. Creating a plan can help you strategize your taxes, potentially keeping them low throughout your life, not just once a year.
- Investment Planning – Retirement accounts are a means of saving for your future retirement. Choosing the right account or opting for a Roth conversion can help you save money throughout your life. Roth retirement accounts are advantageous because they allow you to pay taxes on your contributions upfront, rather than when you are required to withdraw the funds later.
- Healthcare Planning – You cannot create a complete financial plan without considering your healthcare options, particularly in retirement when they may change.
- Legacy Planning & Insurance – Planning your legacy: what you will leave behind for your loved ones and how you can protect them after you pass.
Learn More: Step-by-Step Retirement Planning: How to Get Started
Not discussing taxes with the help of professionals
Utilize your resources, particularly professionals who are knowledgeable about taxes. Combining your personal tax knowledge with the expertise of a professional can give you a significant advantage. Professionals exist for a reason; take advantage of their services. They can help you understand your personal tax situation and develop strategies to reduce your overall tax bill.
Get personalized tax help by scheduling a 15-minute strategy call with a financial advisor.
https://210financial.com/schedule-a-meeting/
Conclusion:
Mistakes happen; they are a part of life. However, it's important to take the time now to avoid common tax planning mistakes that could impact your future. Consider consulting with a professional, creating detailed plans, examining taxes from all angles, and completing tasks promptly. We wish you the best this season and in all your future tax matters!
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