While Jon and I recapped the tax and financial planning effects of the recently passed tax legislation on August 8, we wanted to reiterate a few of them each month. These rule changes take effect in 2026:
- The estate and gift tax limit is now $15 million per person
- Qualified distributions from 529 plans (college funding) now allow up to $20,000 per year to be used for K-12 expenses
- The dependent care FSA limit has increased from $5,000 to $7,500
- The threshold for 1099 reporting has increased from $600 to $2,000
- If you are an educator that uses your own money to pay for supplies, you can now deduct all of the unreimbursed expenses on Schedule A if you itemize your deductions.
According to FactSet, over 80% of companies in the S&P 500 beat their earnings estimates for Q2 2025. Since a key determinant of long-term stock prices is future expected earnings, this high percentage bodes well for the stock market as a whole. (When you buy a stock, you are buying a proportional share of their future earnings).
According to the Washington Post, Energy prices have spiked partially due to the proliferation of data centers (powering the growth of AI?). Interestingly, the cost of electricity in the state of Maine grew faster than all but CA and MA over the past 10 years. However, ME still boasts the 2nd cheapest electrical rates in New England (after Vermont).
Congratulations Evan!
Our own Evan Marquis obtained his CFP certification this past May. Congratulations, Evan!
Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Talk to an advisor or call (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.
Disclaimer:
This material is provided for educational and informational purposes only and is not investment, tax, legal, or financial advice. It does not consider any individual’s investment objectives, strategies, tax situation, or time horizon, and it is not an offer to sell or a solicitation to buy any security. Financial aid rules, tax laws, and school policies change frequently and vary by institution; figures cited are as of October 2026. Investing in a 529 plan involves risk, including the possible loss of principal. Before investing, review the plan’s offering documents for its investment objectives, risks, fees, and expenses, and consider whether your home state offers tax benefits only for its own plan. Please review your personal situation with your tax and/or financial advisor before acting.
Views expressed are subject to change based on market and other conditions. Any projections, market outlooks, estimates, or other forward-looking views are based on assumptions, are not indicative of future performance, and actual results may differ materially. Information is obtained from third-party sources believed to be accurate, but Milestone makes no representation as to its accuracy, completeness, or timeliness and accepts no liability for decisions based on it. Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal.
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