10/15/2026
2026 YEAR-END TAX PLANNING OPPORTUNITIES
As we approach the end of 2026, we would like to remind you that there is still time to take advantage of tax planning opportunities that may reduce your 2026 federal and state income tax liabilities.
Effective tax planning requires reviewing your financial situation before December 31, rather than waiting until tax return preparation begins in the spring. Depending on your circumstances, several strategies may provide meaningful tax savings.
1. Qualified Charitable Distributions (QCDs)
If you are age 70½ or older and have a traditional IRA, consider making charitable contributions directly from your IRA to a qualified charitable organization. A Qualified Charitable Distribution may satisfy all or part of your Required Minimum Distribution (RMD) without increasing your adjusted gross income.
For 2026, the annual QCD limit is $108,000 per eligible individual. To qualify for the 2026 tax year, the distribution must be completed by December 31, 2026.
2. Mississippi College Savings Contributions — MPACT and MACS
Mississippi residents may be eligible for a state income tax deduction for contributions to the Mississippi Prepaid Affordable College Tuition (MPACT) program or the Mississippi Affordable College Savings (MACS) program.
Generally, qualifying contributions are deductible up to $10,000 per taxpayer or $20,000 for married taxpayers filing jointly, subject to applicable limitations.
These programs offer an opportunity to save for future educational expenses while potentially reducing your Mississippi income tax liability.
3. Capital Loss Harvesting
Review your investment portfolio for stocks or other securities that have declined in value. Selling underperforming investments before year-end may generate capital losses that can offset capital gains realized during 2026.
If capital losses exceed capital gains, individuals may generally deduct up to $3,000 of the remaining net capital loss against ordinary income, with unused losses carried forward to future years.
Securities that have become completely worthless may also qualify for capital loss treatment, subject to specific IRS rules. Be mindful of the wash-sale rules when selling investments at a loss.
4. Take Advantage of the 0% Capital Gains Tax Rate
Taxpayers whose taxable income falls within certain thresholds may qualify for a 0% federal income tax rate on long-term capital gains.
For 2026, the 0% long-term capital gains bracket generally applies to taxable income up to:
$98,900 for married taxpayers filing jointly
$49,450 for single taxpayers
If your projected taxable income is below these thresholds, it may be advantageous to recognize additional long-term capital gains before December 31.
This strategy may be particularly beneficial for retirees, taxpayers experiencing a temporary reduction in income, or individuals holding appreciated investments. Capital gains may still be subject to state income taxes, and other federal tax considerations may apply.
5. Retirement Plan Contributions
Consider maximizing allowable contributions to your retirement accounts. Contributions to traditional IRAs, 401(k) plans, SEP IRAs, and other qualified retirement plans may provide current-year tax benefits, depending on your eligibility and the applicable contribution deadlines.
Business owners should also evaluate retirement plan options before year-end.
6. Charitable Contributions and Other Available Deductions
Review anticipated charitable contributions and other deductible expenses to determine whether accelerating certain payments into 2026 would provide a tax benefit.
Changes to federal tax law may also create additional opportunities depending on your age, income, filing status, and whether you itemize deductions.
PLAN NOW — NOT AFTER DECEMBER 31
Many tax-saving opportunities require action before the end of the calendar year. Once December 31 has passed, certain strategies are no longer available for the 2026 tax year.
We encourage you to contact our office to discuss your projected 2026 income and determine whether any of these strategies may be appropriate for your situation.
Our goal is not simply to prepare your tax returns accurately, but to help you make informed financial decisions that minimize your tax liability whenever possible.
Williams, Pitts & Beard, PLLC
This correspondence provides general tax planning information. Individual circumstances, eligibility requirements, and applicable federal and state tax laws should be reviewed before implementing any strategy.
