Should you own assets jointly with an adult child?

If you had significant medical expenses last year, you may be wondering what you can deduct on your 2025 income tax return. Income-based thresholds and other rules can make it hard to claim the medical expense deduction. At the same time, more types of expenses may be eligible than you might expect. Limits on the deduction Medical expenses are deductible only if they weren’t reimbursable by insurance or paid via tax-advantaged accounts (such as Flexible Spending Accounts or Health Savings Accounts). In addition, they’re deductible only to the extent that, in aggregate, they exceed 7.5% of your adjusted gross income (AGI). For example, if your 2025 AGI was $100,000, your eligible medical expenses during the year would have to total more than $7,500 for you to claim the deduction — and only the amount in excess of that floor would be deductible. If you had $10,000 in eligible expenses, your potential deduction would be $2,500. In addition, medical expenses are deductible only if you itemize deductions. For itemizing to be beneficial, your itemized deductions must exceed your standard deduction. Due to changes under the Tax Cuts and Jobs Act that were made permanent by last year’s One Big Beautiful Bill Act (OBBBA), many taxpayers no longer itemize. However, some taxpayers who hadn’t been itemizing recently may benefit from itemizing for 2025 because of the OBBBA’s quadrupling of the state and local tax deduction limit. If you fall into that category, you should also revisit whether you can benefit from the medical expense deduction on your 2025 income tax return. What expenses are eligible? If you do expect to itemize deductions on your 2025 income tax return, now is a good time to review your medical expenses for the year and see if you had enough to exceed the 7.5% of AGI floor. Eligible expenses include many costs besides hospital and doctor bills. Here are some other types of expenses you may have had in 2025 that could be deductible: Transportation. The cost of getting to and from medical treatment is an eligible expense. This includes taxi fares, public transportation or using your own vehicle. Your vehicle costs can be calculated at 21 cents per mile for medical miles driven in 2025, plus tolls and parking. Alternatively, you can deduct certain actual vehicle-related costs, including gas and oil, but not general costs such as insurance, depreciation and maintenance. Insurance premiums. The cost of health insurance is a medical expense that can total thousands of dollars a year. Even if your employer provides you with coverage, you can deduct the portion of the premiums you paid — as long as it wasn’t paid pretax out of your paychecks. Long-term care insurance premiums also qualify, subject to dollar limits based on age. Here are the 2025 limits: 40 and under: $480 41 to 50: $900 51 to 60: $1,800 61 to 70: $4,810 Over 70: $6,020 Therapists and nurses. Services provided by individuals other than physicians can qualify if they relate to a medical condition and aren’t for general health. For example, the cost of physical therapy after knee surgery qualifies, but the cost of a personal trainer to help you get in shape doesn’t. Also qualifying are amounts paid for acupuncture and those paid to a psychologist for medical care. In addition, certain long-term care services required by chronically ill individuals are eligible. Eyeglasses, hearing aids, dental work and prescriptions. Deductible expenses include the cost of glasses, contacts, hearing aids, dentures and most dental work. Purely cosmetic expenses (such as teeth whitening) don’t qualify, but certain medically necessary cosmetic surgery is deductible. Prescription drugs qualify, but nonprescription drugs such as aspirin don’t, even if a physician recommends them. Smoking-cessation programs. Amounts paid to participate in a smoking-cessation program and for prescribed drugs designed to alleviate nicotine withdrawal are deductible expenses. However, nonprescription gum and certain nicotine patches aren’t. Weight-loss programs. A weight-loss program is a deductible expense if undertaken as treatment for a disease diagnosed by a physician. This could be obesity or another disease, such as hypertension, for which a doctor directs you to lose weight. It’s a good idea to get a written diagnosis. In these cases, deductible expenses include fees paid to join a weight-loss program and attend meetings. However, foods for a weight-loss program generally aren’t deductible. Dependents and others. You can deduct the medical expenses you pay for dependents, such as your children. Additionally, you may be able to deduct medical expenses you pay for an individual, such as a parent or grandparent, who would qualify as your dependent except that he or she has too much gross income or files jointly. In most cases, the medical expenses of a child of divorced parents can be claimed by the parent who pays them. Determining if you can benefit After reviewing this list of eligible expenses, do you think you had enough in 2025 to exceed the 7.5% of AGI floor? Or do you have questions about whether specific expenses qualify? Contact us. We can determine if you can benefit from the medical expense deduction — and other tax breaks — on your 2025 income tax return. © 2026 

Do you operate a business as a partnership, a limited liability company (LLC) treated as a partnership for tax purposes or an S corporation? In tax lingo, these are called “pass-through” entities because their taxable income items, tax deductions and tax credits are passed through to their owners and taken into account on the owners’ federal income tax returns. These entities generally don’t owe any federal income tax themselves. Here are some important things to know about tax filing for pass-through entities. March 16 deadline Even though pass-through entities generally don’t owe federal income tax at the entity level, they still must file a federal income tax return. Partnerships and LLCs treated as partnerships for tax purposes file Form 1065, “U.S. Return of Partnership Income.” S corporations file Form 1120-S, “U.S. Income Tax Return for an S Corporation.” If your pass-through entity uses the calendar year for tax purposes, as most do, the deadline for filing the federal income tax return for its 2025 tax year is March 16, 2026 (because March 15 falls on a Sunday). The March 16 deadline can be extended by six months to September 15, 2026, by filing IRS Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” by March 16. Keep in mind that if you file an extension for the pass-through entity’s return, you (and any other owners) will also likely also need to file extensions to October 15, 2026, for your individual 2025 return. Schedules K-1 For each tax year, pass-through entities must send out Schedules K-1 to their owners. These forms report each owner’s share of the entity’s tax items. Schedules K-1 can be sent to owners electronically. And they must be included with the entity’s federal income tax return for the year. Because pass-through entity owners rely on Schedules K-1 to prepare their returns, it’s desirable to get them out as early as possible. However, if an entity’s 2025 return filing deadline is extended to September 15, 2026, that also becomes the deadline for providing Schedules K-1 to the owners. 3 tax law changes to note The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, included several tax changes that will affect 2025 returns of pass-through entities. Here are three of the most important: 1. First-year depreciation. The OBBBA permanently restored 100% first-year depreciation for eligible assets acquired and placed in service after January 19, 2025. Before the OBBBA, 100% bonus depreciation was last allowed for eligible assets placed in service in 2022. For eligible assets placed in service in tax years beginning in 2025, the OBBBA increased the maximum amount that can be immediately deducted via the first-year Section 179 expensing election to $2.5 million (up from $1.25 million before the OBBBA). The deduction begins to phase out dollar for dollar when asset acquisitions for 2025 exceed $4 million (up from $3.13 million before the OBBBA). The OBBBA also established 100% first-year depreciation for nonresidential real estate that’s classified as qualified production property. That basically means factory buildings. 2. R&E expenditures. The OBBBA allows businesses to immediately deduct eligible domestic research and experimental (R&E) expenditures that are paid or incurred in tax years beginning in 2025 and beyond. Before the OBBBA, these expenditures had to be amortized over five years. Eligible small businesses can elect to apply the new immediate deduction rule retroactively to pre-2025 tax years beginning in 2022, 2023 or 2024. Also, all taxpayers that made R&E expenditures in tax years beginning in 2022 through 2024 can elect to write off the remaining unamortized amount of their R&E expenditures over a one-year or two-year period starting with the tax year beginning in 2025. 3. Business interest expense deductions. For tax years beginning in 2025 and beyond, the OBBBA permanently installed more favorable rules for determining how much business interest expense can be currently deducted. While most small and midsize businesses are exempt from the business interest expense deduction limitation rules, check with us regarding the status of your pass-through entity. Time to get rolling The filing deadline for the 2025 federal income tax returns of most pass-through entities is looming. While the deadline can be extended by six months, you must take action by March 16, at minimum, to file for an extension. Contact us to get things rolling. © 2026 

A Crummey trust provides a key tax benefit of an outright gift without some of the downsides. Although the mechanics can seem technical, the concept is straightforward. And the benefits can be significant for families looking to reduce estate taxes and provide long-term financial security. How does a Crummey trust work? A Crummey trust (named after the 1968 court case that first authorized its use) is a special type of trust that allows gifts to it to qualify for the gift tax annual exclusion. Yet unlike with an outright gift, you still determine, through the trust terms, how the assets will be managed and when they’ll ultimately be distributed to beneficiaries. Generally, assets placed in a trust are treated as future interests and, therefore, don’t qualify for the annual exclusion ($19,000 per beneficiary in 2026). So you normally would have to use some of your lifetime gift and estate tax exemption ($15 million for 2026) to make tax-free gifts to a trust. However, a Crummey trust overcomes this limitation by granting beneficiaries a temporary right to withdraw contributions made to it. Here’s how it works: Each time you contribute assets to the trust, the trustee must send a Crummey notice to the trust’s beneficiaries. This notice informs them that they have a limited window — typically 30 to 60 days — to withdraw their shares of the contribution. Because the beneficiaries technically have immediate access to the funds, the IRS treats the gift as a present interest, allowing it to qualify for the annual exclusion. After the withdrawal period expires, the funds remain in the trust (assuming the beneficiaries didn’t exercise their withdrawal rights) and are managed and eventually distributed according to the trust terms, such as when beneficiaries reach specific ages or to fund certain types of expenses. A Crummey trust is an irrevocable trust, meaning once assets are transferred into it, you, the grantor, generally can’t reclaim them. You determine the trust terms when you set up the trust. But, with limited exceptions, you can’t change them after the trust is initially funded. Because the trust is irrevocable, the trust assets won’t be included in your taxable estate, provided all applicable rules are met. This also effectively removes future appreciation on those assets from your taxable estate. When can they be particularly beneficial? Crummey trusts are often used in conjunction with irrevocable life insurance trusts (ILITs). An ILIT owns one or more policies on your life, and it manages and distributes policy proceeds according to your wishes. An ILIT keeps insurance proceeds, which could otherwise be subject to estate tax, out of your estate (and possibly your spouse’s). You aren’t allowed to retain any powers over the policy, such as the right to change the beneficiaries. But the trust can be structured to make a loan to your estate for liquidity needs, such as paying estate tax. Structuring ILITs as Crummey trusts allows annual exclusion gifts to fund the ILIT’s payment of insurance premiums. There’s an incentive for beneficiaries not to exercise their withdrawal rights so that the premiums can be paid to maintain the policy. The trust can potentially provide beneficiaries with a much larger payout later from the life insurance death benefit. Any tax traps? Before using a Crummey trust, it’s important to consider potential tax traps. One involves inadvertent taxable gifts from one beneficiary to another. Suppose, for example, that you set up a trust that provides income for your spouse for life, with any remaining assets passing to your daughter. To take advantage of the annual exclusion, you provide your spouse with Crummey withdrawal rights. Each time your spouse allows these rights to lapse without exercising them, he or she in effect has made a gift to your daughter by increasing the value of her future interest in the trust. There are a couple of ways to avoid this result. One is to rely on the IRS’s “5&5” rule, which doesn’t count lapsing rights as a taxable gift as long as the withdrawal right doesn’t exceed the greater of $5,000 or 5% of the trust’s principal. So long as the trust principal is at least $380,000, you’ll be able to make $19,000 annual gifts without violating the 5&5 rule. Another option is to make the holder of Crummey withdrawal rights the sole beneficiary of the trust, which eliminates the gift tax concern. Need help? While a Crummey trust can be a powerful estate planning tool, it must be properly drafted and administered, including timely notices of withdrawal and careful recordkeeping. If you’re considering a Crummey trust, contact us. We can help ensure this trust type aligns with your broader financial and estate goals. © 2026 

For many employees, mobile phones are no longer a perk — they’re an essential business tool. However, issuing company phones or reimbursing employees for use of their personal devices can create hidden security risks, unexpected tax consequences and productivity concerns for business owners. Here are some key issues to consider before rolling out or revising your company’s mobile phone policy. Security risks In general, the biggest security risk associated with mobile phones is that they may lack robust protections against phishing, malware and other cyberthreats. Hackers could use an employee’s phone to access your business’s IT network, leading to theft of customer payment details, payroll data, intellectual property and other sensitive information. An illicit entry could even result in a ransomware incident. If you allow employees to use phones to access company data, use a mobile device management system that enforces strong security protocols. And instruct phone users to avoid using public Wi-Fi networks (such as those in airports) that could expose them to data interception and malware. Tax rules for work-issued phones Another consideration is taxes. Business use of an employer-provided phone typically is treated as a nontaxable working condition fringe benefit if it’s provided “primarily for noncompensatory business purposes.” For example, you may need to reach employees at any time for work-related emergencies. If the noncompensatory business purposes test is met, the value of any personal use of an employer-provided smartphone will generally be treated as a nontaxable “de minimis” fringe benefit. However, these phones will trigger taxable income if they’re provided to replace compensation, attract new hires or boost staff morale. Guidelines for employee-owned devices The IRS has indicated that it analyzes expense reimbursement for employees’ personal phones similarly to how it treats employer-provided phones. So reimbursements generally won’t be considered additional income or wages if: You have substantial business reasons for requiring employees to use their personal phones and reimbursing them for doing so, Reimbursements are reasonably related to the needs of your operations and calculated not to exceed the expenses that employees typically incur in maintaining their phones, and Reimbursements aren’t made as a substitute for a portion of employees’ regular wages. Employer reimbursements for employees’ actual expenses must usually be made under a so-called accountable plan (contact us for more information). Alternatively, you could provide employees with flat monthly stipends. But stipends that exceed reasonable amounts may be treated as taxable wages. Formal usage policies To protect productivity, it’s critical to create written phone-usage policies. Discourage employees from using company-owned phones or their personal devices to make long personal calls, access their social media accounts or stream non-work-related videos during work hours. If you allow employees to use their own phones at work, be sure to establish a bring-your-own-device (BYOD) policy. In addition to proper usage, it should address such issues as security, data ownership, privacy (for example, your ability to view employee phone data) and proper use. Your BYOD policy might also detail procedures for wiping personal devices when employees leave your employment. Pros and cons Many positions call for the frequent use of mobile phones — your executives, salespeople and other “road warriors” are only a few who probably need them. Depending on the nature of your business, it may make sense to issue or reimburse the use of personal phones as a fringe benefit to other employees. We can help you review the pros and cons related to equipment costs, security, taxes and productivity. © 2026 

Every year, severe storms, flooding, wildfires and other disasters affect millions of taxpayers. Many experience casualty losses from damage to their homes or personal property. The One Big Beautiful Bill Act (OBBBA), signed into law last year, generally made permanent the Tax Cuts and Jobs Act (TCJA) limitation on the personal casualty loss tax deduction. But it also expanded the deduction in one way. What’s deductible For losses incurred from 2018 through 2025, the TCJA generally restricted deductions for personal casualty losses to those due to federally declared disasters. This is the rule that applies to your 2025 income tax return due April 15, 2026. (Before the TCJA, personal casualty losses were also potentially deductible if due to various other types of incidents, such as theft, vandalism and accidents as well as to fires, floods, etc., not attributable to a federally declared disaster.) The OBBBA generally has made the disaster requirement permanent. But, effective January 1, 2026, it expands eligible disasters to include certain state-declared disasters. This applies to the tax return you’ll file next year for 2026. There’s an exception to the general rule, however: If you have personal casualty gains because your insurance proceeds exceed the tax basis of the damaged or destroyed property, you can deduct personal casualty losses that aren’t due to a declared disaster up to the amount of your personal casualty gains. Additional limits Even when the cause of a personal casualty loss qualifies you for the deduction, additional limits apply. First, your deduction for the loss from the declared disaster is reduced by any insurance proceeds received. If insurance covered your entire loss, you can’t claim a casualty loss deduction for that loss. If insurance didn’t cover your entire loss, then $100 (per casualty event) must be subtracted from the uncovered amount. Finally, a 10% of adjusted gross income (AGI) floor applies. So you can deduct only the uncovered loss (reduced by $100 per casualty event) that exceeds 10% of your AGI for the year you claim the loss deduction. If, say, your 2025 AGI is $100,000 and your casualty loss (after subtracting insurance proceeds and $100 per event) is $11,000, you can deduct only $1,000 on your 2025 return. Also keep in mind that you must itemize deductions to claim the casualty loss deduction. Since 2018, fewer people have itemized because the TCJA significantly increased the standard deduction amounts — and the OBBBA has increased them further. For 2025, they’re $15,750 for single filers, $23,625 for heads of households, and $31,500 for married couples filing jointly. For 2026, they’re $16,100, $24,150 and $32,200, respectively. So even if you qualify for a casualty deduction under the rules and limits, you might not get any tax benefit because you don’t have enough total itemized deductions to exceed your standard deduction. Have questions? The rules for the personal casualty loss deduction are complex, so contact us for more information. We can help you determine whether you qualify for — and will benefit from — this deduction on your 2025 income tax return. © 2026 

With 2025 in the rear view mirror and the tax filing deadline on the road ahead, it’s a good time for businesses to start gathering information about their deductible expenses for 2025. But what’s deductible (and what’s not) might not be as clear-cut as you think. Most business deductions aren’t specifically listed in the Internal Revenue Code (IRC). The general rule is what’s stated in the first sentence of IRC Section 162, that you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” In addition, you must be able to substantiate the expenses. Ordinary and necessary In general, an expense is ordinary if it’s considered common or customary in the particular trade or business. For example, a landscaping company’s costs for fuel and routine maintenance on its lawn equipment would typically qualify as ordinary expenses because such costs are customary for that type of business. A necessary expense is defined as one that’s helpful or appropriate. For instance, a retail store that invests in security cameras may be able to operate without them, but the expense is helpful for reducing theft and protecting employees and customers. To be deductible, an expense must be both ordinary and necessary. An ordinary expense may be unnecessary because the amount isn’t reasonable in relation to the business purpose. For example, let’s say a construction business upgrades to premium, top-of-the-line tools when standard professional-grade tools already meet job requirements. Tool purchases are ordinary, but excessive upgrades may be unreasonable and, thus, unnecessary. Cases in point The IRS and courts don’t always agree with taxpayers about what qualifies as a deductible business expense. Often substantiation is the primary issue. Sometimes the question hinges not on the expense itself, but on whether the taxpayer was actually operating a trade or business. For example, the U.S. Tax Court denied deductions claimed by an engineering firm owner for the value of his own time spent developing a program. Self-performed labor isn’t “paid or incurred,” the court noted. Therefore, it’s not deductible. The court disallowed other deductions due to insufficient records and lack of a clear business purpose. In another case, a taxpayer engaged in real estate activities. His business expense deductions were denied by the Tax Court. The court ruled that the activities didn’t constitute an active trade or business. Instead, the real estate was held for investment purposes. In addition, the deductions weren’t substantiated because adequate records weren’t kept. The taxpayer appealed. The U.S. Court of Appeals for the Ninth Circuit agreed with the Tax Court. The court ruled the taxpayer “failed to provide sufficient evidence of his claimed deductions.” What can you deduct for 2025? Determining the deductibility of business expenses can be complicated, and proper substantiation is critical. We can help you determine what you can deduct on your 2025 tax return. © 2026 

When creating or updating your estate plan, it’s important to address your elderly parents with both clarity and sensitivity. If you provide financial support, share housing or anticipate future caregiving responsibilities, your plan should reflect these realities.  Clearly documenting any ongoing assistance, loans or shared assets can help prevent misunderstandings among heirs later. In addition, if your parents have designated you to act on their behalf through powers of attorney or health care directives, your estate plan should align with those roles so there are no conflicting instructions or expectations. 5 steps To incorporate your parents’ needs into your own estate plan, you first must understand their financial situation and any arrangements they’ve already made. Some may require tweaking. Here are five action steps: 1. List and value their assets. If you’re going to manage the financial affairs of your parents, having knowledge of their assets is vital. Compile and maintain a list of all their assets. These may include not only physical assets like their home and other real estate, vehicles, and any collectibles or artwork, but also investment holdings, retirement accounts and life insurance policies. You’ll need to know account numbers and current balances. Be sure to add in projections for Social Security benefits. When all is said and done, don’t be surprised if their net worth is higher or lower than what you (or they) initially thought. You can use this information to determine the appropriate planning techniques. 2. Identify key contacts. Compile the names and addresses of professionals important to your parents’ finances and medical conditions. This may include stockbrokers, financial advisors, attorneys, tax professionals, insurance agents and physicians. 3. Open the lines of communication. Before going any further, have a discussion with your parents, as well as other family members who may be involved, such as your siblings. Make sure you understand your parents’ wishes and explain the objectives you hope to accomplish. 4. Execute documents. Assuming you can agree on next steps, develop a plan that incorporates several legal documents. If your parents have already created one or more of these documents, they may need to be revised or coordinated with new ones. Some documents commonly included in an estate plan include: Wills. Your parents’ wills control the disposition of their assets and tie up other loose ends. (Of course, jointly owned property with rights of survivorship automatically passes to the survivor.) Notably, a will also appoints an executor for your parents’ estates. If you’re the one lending financial assistance, you’re probably the optimal choice. Living trusts. A living trust can supplement a will by providing for the disposition of selected assets. Unlike a will, a living trust doesn’t have to go through probate, which can save time and money while avoiding public disclosure. Beneficiary designations. Your parents probably have filled out beneficiary designations for retirement accounts and life insurance policies. These designations supersede references in a will, so it’s important to keep them up to date. Powers of attorney. A power of attorney authorizes someone to legally act on behalf of another person, such as to handle financial matters or make health care decisions. With a durable power of attorney, the most common version, the authorization continues should the person become unable to make decisions for him- or herself. This enables you to better handle your parents’ affairs. Living wills or advance medical directives. These documents provide guidance for end-of-life decisions. Make sure your parents’ physicians have copies. 5. Make gifts. If you decide the best approach for helping your parents is to give them monetary gifts, it’s relatively easy to avoid gift tax liability. Under the gift tax annual exclusion, you can give each recipient up to $19,000 for 2026 without incurring gift tax, doubled to $38,000 per recipient if your spouse joins in the gift. If you give more, the excess may be transferred tax-free under your available lifetime gift and estate tax exemption ($15 million for 2026, less any exemption you’ve already used during your life). Be wary, however, of giving gifts that may affect eligibility for certain government benefits. The availability of these benefits varies by state. Plan for contingencies Your estate plan should specify how you want to assist aging parents should they outlive you. For example, consider setting aside funds for their care or naming a trusted individual to manage those resources. Thoughtful provisions can reduce stress for your family and ensure your parents are treated with dignity and respect. These situations often involve emotional and financial complexity. Contact us to help develop a comprehensive plan that addresses your family’s needs. © 2026

Debt is inevitable for most small and midsize businesses. Loans are commonly used to help fund a company’s launch, expansion, equipment purchases and cash flow. When problems arise, it’s generally not because debt exists; it’s because the terms of that debt no longer match the operational realities of the business. In such instances, debt restructuring is worth considering. Making debt more manageable At its core, debt restructuring is the process of revisiting existing loan arrangements to make them more manageable for the company. It focuses on adjusting current obligations so they better align with the business’s projected cash flow and operating needs. This can be a more sustainable approach than, say, taking on new debt or ignoring the growing pressure. For small and midsize businesses, debt restructuring is generally handled through direct negotiations with lenders. Options may include: Extending repayment periods, Modifying payment schedules in other ways, Adjusting interest rates, and Consolidating multiple loans. The goal is to allow the business to continue operating normally while meeting its obligations. Warning signs If debt begins to consistently dictate operational decisions, step back and evaluate whether the structure of those obligations is a problem. Warning signs usually surface gradually. Monthly payments may start to limit the company’s ability to maintain adequate cash reserves, invest in growth or handle unexpected expenses. If you find yourself increasingly relying on short-term borrowing to cover routine costs or juggling payment due dates to stay current, it might be time to explore restructuring. That said, many healthy businesses explore debt restructuring as a way to strengthen their overall financial positions. Changes in customer demand, economic conditions, interest rates and operating costs can all be valid reasons to consider it. Timing and perspective Among the most important aspects of debt restructuring are timing and perspective. From a timing standpoint, options are generally broader and more flexible when you address concerns early. Waiting until payments are missed or covenants are violated reduces your leverage with lenders. Perspective matters just as much. Ideally, you should approach restructuring as a proactive strategic adjustment to financial obligations rather than a desperate last resort. Doing so will help you focus conversations with lenders on long-term sustainability rather than a short-term bailout. However, be realistic. Although debt restructuring can ease cash flow pressure and create breathing room to reset strategic objectives, it can’t fix deeper operational or profitability issues. If your business model is no longer viable, restructuring may provide temporary relief but not a permanent solution. It tends to work best when paired with a clear understanding of a company’s financial position and future outlook. Guidance is essential If your business is facing increasing debt pressure, restructuring may be the right solution. But that doesn’t mean you should immediately pick up the phone and call your lender. Professional guidance is essential. We can help assess the implications of restructuring and whether better alternatives are available. © 2025 

Many tax figures are annually adjusted for inflation and typically increase each year (or at least every few years). For 2026, some additional changes are going into effect under the One Big Beautiful Bill Act, signed into law July 4, 2025. Here’s an overview of some important limits and other tax figures for 2026. Keep in mind that exceptions or additional rules or limits may apply. Standard deduction Single and married filing separately: $16,100 Head of household: $24,150 Married couples filing jointly: $32,200 Additional standard deduction for those age 65 or older and/or blind: $2,050 ($1,650 per spouse if married). For taxpayers both 65 or older and blind, the additional deduction is doubled. Itemized deduction limits Casualty loss deduction: only for eligible losses from federally or (new for 2026) state-declared disasters Charitable deduction floor (new for 2026): 0.5% of adjusted gross income (AGI) Mortgage interest deduction: interest on qualified debt up to $750,000 Medical expense deduction floor: 7.5% of AGI State and local tax deduction: $40,400 Overall limit for higher-income taxpayers (new for 2026): Generally, the tax benefit from itemized deductions for taxpayers in the 37% bracket will be as if they were in the 35% bracket Retirement plan limits Traditional and Roth IRA contributions: $7,500 Traditional and Roth IRA catch-up contributions for those age 50 or older: $1,100 401(k), 403(b) and 457 plan deferrals: $24,500 401(k), 403(b) and 457 plan catch-up contributions for those age 50 or older: $8,000 401(k), 403(b) and 457 plan additional catch-up contributions for those age 60, 61, 62 or 63: $3,250 SIMPLE deferrals: $17,000 SIMPLE catch-up contributions for those age 50 or older: $4,000 SIMPLE additional catch-up contributions for those age 60, 61, 62 or 63: $1,250 Contributions to defined contribution plans: $72,000 Annual benefit limit for defined benefit plans: $290,000 Other tax-advantaged savings limits Health Savings Account (HSA) contributions: $4,400 for individuals, $8,750 for family coverage Health Flexible Spending Account (FSA) contributions: $3,400 Child and dependent care FSA contributions: $7,500 Trump account contributions: $5,000 Estate planning Gift and estate tax exemption: $15 million Generation-skipping transfer tax exemption: $15 million Annual gift tax exclusion: $19,000 (unchanged from 2025) 2026 tax planning These are only some of the figures and limits that could affect your 2026 taxes. To learn more and begin planning for the new year, contact us.  © 2025