Designed for your clarity.

2026–2027 Tax Updates & Planning Opportunities

Dear Client,

As year-end approaches, here are the key tax changes and deadlines to keep in mind.

Charitable Giving: New Rules for 2026

• If you take the standard deduction: You may now deduct up to $1,000 of cash gifts made directly to charities ($2,000 for married couples). Gifts to donor-advised funds don’t qualify.
• If you itemize: Only gifts above 0.5% of your income are deductible. For example, with $200,000 of income, the first $1,000 of gifts isn’t deductible.

Higher Retirement Contribution Limits

For 2026, you may contribute up to $24,500 to most 401(k) and 403(b) plans and $7,500 to an IRA, plus catch-up contributions if you’re 50 or older. If your prior-year wages exceeded about $150,000, 401(k) catch-up contributions must now be made as Roth contributions.

New Scholarship Tax Credit in 2027

Starting in 2027, donations to approved scholarship organizations may earn a federal tax credit of up to $1,700 ($3,400 for married couples). A credit reduces your tax dollar for dollar. We’ll share more details as IRS guidance becomes final.

Opportunity Zone Investors and Upcoming Sales

If you hold an existing Opportunity Zone investment, or are planning a significant sale, please contact us. Deferred gains become taxable on December 31, 2026, and new rules starting in 2027 may offer fresh opportunities to defer and reduce tax on gains.

Key Deadlines

December 31, 2026

Charitable gifts, 401(k)/403(b) payroll contributions, and year-end sales

December 31, 2026

Original Opportunity Zone deferred gains become taxable

April 15, 2027

IRA contributions for 2026

Not every change applies to everyone. To discuss how these updates may affect you, please reach out to your client representative, or email us at firm@hirschfeldcpa.com to schedule a year-end planning meeting.

Warm regards,

Hirschfeld & Co. CPA

This communication provides general information and is not intended as tax advice for any specific situation. Some provisions are subject to forthcoming IRS guidance and may change.