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. Effective next year (2026), those that itemize their deductions will find that their charitable deductions will be reduced by 0.5% of their adjusted gross income (AGI). For example, if your AGI is $300,000 and you contribute $30,000 to charity, your tax deduction will be $28,500 ($30,000 less $300,000 x 0.005). If you don’t itemize your deductions, you can still deduct charity without worrying about these limits, up to $1,000 if you file single and $2,000 if you file married filing joint. Lastly, if you are in the 37% tax bracket, you will only get the benefit of 35% x your deductible charity.
You can get around these limits by making qualified charitable distributions from your IRA if you are older than age 70.5.
The IRS has issued a draft of new form 1A, to calculate the 4 new tax deductions for tips, overtime, car loan interest and the enhanced deduction for seniors.
You may have heard that catch-up contributions to 401k plans (which generally apply to those age 50 and over) must be added to the Roth portion of the plan (making them taxable income) for individuals who earned over $145,000 in the prior year, effective this coming January (2026). The IRS has issued final regulations on the matter, which are effective in 2027.
Milestone is hiring for two positions! If you know anyone interested, please have them send their resume and cover letter to jobs@milestonefinancialplanning.com.
- Client Service Rep – We are looking for someone who is detail oriented, client service focused and has a bachelor’s degree.
- Marketing Assistant – We are looking for someone with a bachelor’s degree in marketing that is experienced with digital marketing, including Google Ads.
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:
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Milestone Financial Planning, LLC (“Milestone”) is a fee-only financial planning firm and registered investment advisor headquartered in Bedford, NH. Registration does not imply a certain level of skill or training. Milestone works with clients on an ongoing, long-term basis, providing financial planning, tax planning, retirement planning, and investment management services. Fees are based on assets under management and may include a financial planning fee. Milestone receives no commissions or referral fees and, as a fiduciary, is required to act in clients’ best interests. Advisory services are offered only where Milestone and its representatives are properly licensed or exempt from licensure. More information, including fees and principal risks, is available in Milestone’s Form ADV Part 2A. For help with your investments or financial planning, contact one of our fee-only advisors.
