Optimize Your Approach to Taxes

For many people, taxes are something to endure once a year. But taxes affect how income is received, how investments grow, how charitable goals are met and how efficiently wealth is preserved. Optimizing isn’t about loopholes or one-time deductions. It’s about understanding the rules and using them intentionally, whether you’re working, moving into retirement or already retired.

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Giving

Charitable Giving

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Giving

Charitable Giving

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Giving

Charitable Giving

Bunching Contributions

Because the standard deduction has grown, fewer people itemize. For 2026, it’s $16,100 for single filers and married filing separately, $24,150 for heads of household, and $32,200 for married couples filing jointly. If your annual giving is close to but below these amounts, you may get little extra tax benefit. “Bunching” concentrates several years of gifts into one year so your itemized deductions exceed the standard deduction, then you take the standard deduction the next year. You give the same amount over time but may get more value from the deductions.

Bunching Contributions

Because the standard deduction has grown, fewer people itemize. For 2026, it’s $16,100 for single filers and married filing separately, $24,150 for heads of household, and $32,200 for married couples filing jointly. If your annual giving is close to but below these amounts, you may get little extra tax benefit. “Bunching” concentrates several years of gifts into one year so your itemized deductions exceed the standard deduction, then you take the standard deduction the next year. You give the same amount over time but may get more value from the deductions.

Bunching Contributions

Because the standard deduction has grown, fewer people itemize. For 2026, it’s $16,100 for single filers and married filing separately, $24,150 for heads of household, and $32,200 for married couples filing jointly. If your annual giving is close to but below these amounts, you may get little extra tax benefit. “Bunching” concentrates several years of gifts into one year so your itemized deductions exceed the standard deduction, then you take the standard deduction the next year. You give the same amount over time but may get more value from the deductions.

2026 standard deduction

The Bar Your Itemized Deductions Need To Clear

Chart data
Label	Value	Group	Planning target
Single	$16,100
Head of household	$24,150
Married, joint	$32,200

Married filing separately: $16,100.

2026 standard deduction

The Bar Your Itemized Deductions Need To Clear

Chart data
Label	Value	Group	Planning target
Single	$16,100
Head of household	$24,150
Married, joint	$32,200

Married filing separately: $16,100.

2026 standard deduction

The Bar Your Itemized Deductions Need To Clear

Chart data
Label	Value	Group	Planning target
Single	$16,100
Head of household	$24,150
Married, joint	$32,200

Married filing separately: $16,100.

Donating Appreciated Assets

Donating publicly traded securities you’ve held for more than a year, instead of cash, generally lets you avoid capital gains tax on the appreciation. If you itemize, the fair market value of the shares may be deductible, subject to IRS limits. The charity receives the full value, and your tax bill shrinks, which works especially well for long-held or concentrated positions.

Donating Appreciated Assets

Donating publicly traded securities you’ve held for more than a year, instead of cash, generally lets you avoid capital gains tax on the appreciation. If you itemize, the fair market value of the shares may be deductible, subject to IRS limits. The charity receives the full value, and your tax bill shrinks, which works especially well for long-held or concentrated positions.

Donating Appreciated Assets

Donating publicly traded securities you’ve held for more than a year, instead of cash, generally lets you avoid capital gains tax on the appreciation. If you itemize, the fair market value of the shares may be deductible, subject to IRS limits. The charity receives the full value, and your tax bill shrinks, which works especially well for long-held or concentrated positions.

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Education

Education Planning

Tax credits reduce your tax bill dollar for dollar.

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Education

Education Planning

Tax credits reduce your tax bill dollar for dollar.

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Education

Education Planning

Tax credits reduce your tax bill dollar for dollar.

Credit

American Opportunity Tax Credit

Up to $2,500 per eligible student for the first four years of college.

Credit

Lifetime Learning Credit

Up to $2,000 per return, including for graduate and professional courses.

Deduction

Student loan interest

Deduct up to $2,500 of interest a year, even if you don't itemize.

Account

529 plans

Grow tax-deferred; tax-free for qualified expenses, including college, trade school, certain room and board, and K–12 tuition up to annual limits.

Credit

American Opportunity Tax Credit

Up to $2,500 per eligible student for the first four years of college.

Credit

Lifetime Learning Credit

Up to $2,000 per return, including for graduate and professional courses.

Deduction

Student loan interest

Deduct up to $2,500 of interest a year, even if you don't itemize.

Account

529 plans

Grow tax-deferred; tax-free for qualified expenses, including college, trade school, certain room and board, and K–12 tuition up to annual limits.

Credit

American Opportunity Tax Credit

Up to $2,500 per eligible student for the first four years of college.

Credit

Lifetime Learning Credit

Up to $2,000 per return, including for graduate and professional courses.

Deduction

Student loan interest

Deduct up to $2,500 of interest a year, even if you don't itemize.

Account

529 plans

Grow tax-deferred; tax-free for qualified expenses, including college, trade school, certain room and board, and K–12 tuition up to annual limits.

Keep in mind

You can’t claim both credits for the same student in the same year, and income limits apply. Unused 529 funds can now be partly rolled into a Roth IRA for the beneficiary, subject to lifetime caps.

Keep in mind

You can’t claim both credits for the same student in the same year, and income limits apply. Unused 529 funds can now be partly rolled into a Roth IRA for the beneficiary, subject to lifetime caps.

Keep in mind

You can’t claim both credits for the same student in the same year, and income limits apply. Unused 529 funds can now be partly rolled into a Roth IRA for the beneficiary, subject to lifetime caps.

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Healthcare

Healthcare And HSAs

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Healthcare

Healthcare And HSAs

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Healthcare

Healthcare And HSAs

If you have a qualified high-deductible health plan, a Health Savings Account offers a rare triple benefit: deductible contributions, tax-deferred growth and tax-free withdrawals for qualified medical expenses. The 2026 limits are $4,400 for individual coverage and $8,750 for family coverage, from all sources combined. Unused balances roll over every year.

After 65, you can still use HSA money tax-free for medical costs, and withdrawals for other purposes are taxed as income without the extra penalty, so an HSA can work like a retirement account. Once you enroll in Medicare you can’t contribute, but you can use your balance for Medicare premiums, deductibles and other out-of-pocket costs.

If you have a qualified high-deductible health plan, a Health Savings Account offers a rare triple benefit: deductible contributions, tax-deferred growth and tax-free withdrawals for qualified medical expenses. The 2026 limits are $4,400 for individual coverage and $8,750 for family coverage, from all sources combined. Unused balances roll over every year.

After 65, you can still use HSA money tax-free for medical costs, and withdrawals for other purposes are taxed as income without the extra penalty, so an HSA can work like a retirement account. Once you enroll in Medicare you can’t contribute, but you can use your balance for Medicare premiums, deductibles and other out-of-pocket costs.

If you have a qualified high-deductible health plan, a Health Savings Account offers a rare triple benefit: deductible contributions, tax-deferred growth and tax-free withdrawals for qualified medical expenses. The 2026 limits are $4,400 for individual coverage and $8,750 for family coverage, from all sources combined. Unused balances roll over every year.

After 65, you can still use HSA money tax-free for medical costs, and withdrawals for other purposes are taxed as income without the extra penalty, so an HSA can work like a retirement account. Once you enroll in Medicare you can’t contribute, but you can use your balance for Medicare premiums, deductibles and other out-of-pocket costs.

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Income

Income And Investment Taxes

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Income

Income And Investment Taxes

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Income

Income And Investment Taxes

Capital gains

0%, 15% or 20%

Long-term gains and qualified dividends, depending on income. Higher earners may owe an extra 3.8% net investment income tax. Timing sales for lower-income years or pairing them with charitable gifts can help.

Social Security

Up to 50% or 85%

Of benefits may be taxable, depending on total income. Those thresholds aren't adjusted for inflation, so more retirees are affected over time.

Required distributions

Age 73 or 75

RMDs begin at 73 for most of today's retirees (75 if born in 1960 or later). They raise taxable income and can affect your bracket, Medicare premiums and how much Social Security is taxed.

Capital gains

0%, 15% or 20%

Long-term gains and qualified dividends, depending on income. Higher earners may owe an extra 3.8% net investment income tax. Timing sales for lower-income years or pairing them with charitable gifts can help.

Social Security

Up to 50% or 85%

Of benefits may be taxable, depending on total income. Those thresholds aren't adjusted for inflation, so more retirees are affected over time.

Required distributions

Age 73 or 75

RMDs begin at 73 for most of today's retirees (75 if born in 1960 or later). They raise taxable income and can affect your bracket, Medicare premiums and how much Social Security is taxed.

Capital gains

0%, 15% or 20%

Long-term gains and qualified dividends, depending on income. Higher earners may owe an extra 3.8% net investment income tax. Timing sales for lower-income years or pairing them with charitable gifts can help.

Social Security

Up to 50% or 85%

Of benefits may be taxable, depending on total income. Those thresholds aren't adjusted for inflation, so more retirees are affected over time.

Required distributions

Age 73 or 75

RMDs begin at 73 for most of today's retirees (75 if born in 1960 or later). They raise taxable income and can affect your bracket, Medicare premiums and how much Social Security is taxed.

Approaching taxes as an ongoing strategy allows you to adapt as life changes... a clear framework can help you respond with confidence instead of urgency.

Older woman exercising outdoors with another person

Approaching taxes as an ongoing strategy allows you to adapt as life changes... a clear framework can help you respond with confidence instead of urgency.

Approaching taxes as an ongoing strategy allows you to adapt as life changes... a clear framework can help you respond with confidence instead of urgency.

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Digital assets

Digital Assets

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Digital assets

Digital Assets

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Digital assets

Digital Assets

The IRS treats cryptocurrency and other digital assets as property. Simply holding them isn’t taxable, but selling for cash, swapping one for another, or using them to buy something usually is. Gains or losses are based on your cost basis and can be short- or long-term. Transactions are generally reported on Form 8949, reporting requirements keep expanding, and unreported activity can bring penalties, so keep careful records across every platform you use.

An ongoing strategy

Pulling It All Together

Charitable giving, education, healthcare, investment income, retirement withdrawals and digital assets all affect your taxes differently. Looked at together, the opportunities become clearer and costly surprises easier to avoid. Tax rules will keep changing, but timing and coordination always matter. Treat taxes as an ongoing strategy and revisit your decisions as your life changes.

An ongoing strategy

Pulling It All Together

Charitable giving, education, healthcare, investment income, retirement withdrawals and digital assets all affect your taxes differently. Looked at together, the opportunities become clearer and costly surprises easier to avoid. Tax rules will keep changing, but timing and coordination always matter. Treat taxes as an ongoing strategy and revisit your decisions as your life changes.

An ongoing strategy

Pulling It All Together

Charitable giving, education, healthcare, investment income, retirement withdrawals and digital assets all affect your taxes differently. Looked at together, the opportunities become clearer and costly surprises easier to avoid. Tax rules will keep changing, but timing and coordination always matter. Treat taxes as an ongoing strategy and revisit your decisions as your life changes.

This material is for informational purposes only and is not intended as a solicitation or as legal, tax, Social Security or investment advice. Consult your tax advisor or attorney for specific advice. Not affiliated with the U.S. Government.