Masters in Business• Apr 15, 2026• 16:30Interview

At The Money: Tax Day Special | Masters in Business

From Masters in Business

Bill Artseronian•Director of Tax Services, Ritholtz Wealth Management

Executive Summary

Upcoming tax law changes for 2026 are creating significant year-end planning opportunities for 2025, particularly for high-income individuals.
The State and Local Tax (SALT) deduction cap is increasing from $10,000 to $40,000, but it is subject to an income phase-out starting at $500,000, requiring careful income timing.
New rules for charitable giving in 2026, including a 0.5% AGI floor and reduced deduction values for top earners, make accelerating donations into 2025 a key strategy.
Changes to retirement accounts include a 2026 mandate for catch-up contributions to be made on a Roth basis, shifting the tax-deferral landscape for individuals over 50.

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Concerns Raised

A new 0.5% AGI floor on charitable deductions will reduce their value starting next year.
The value of all deductions for taxpayers in the 37% bracket will be limited, effectively treating them as if they were in the 35% bracket.
The increased $40,000 SALT deduction is phased out for incomes between $500,000 and $600,000, excluding many high earners.
Starting in 2026, mandatory Roth treatment for catch-up contributions removes the option for a pre-tax deduction for those over 50.

Opportunities Identified

The SALT deduction cap is increasing to $40,000 for taxpayers below the new income phase-out.
Accelerating and 'bunching' charitable gifts into 2025 to maximize deductions before new, less favorable rules take effect.
Utilizing direct indexing and year-round tax-loss harvesting to systematically offset capital gains.
Leveraging a 'mega backdoor Roth' option within a 401(k) plan to build a larger tax-free retirement bucket.

Key Themes

Navigating New Tax Legislation

The discussion is heavily centered on a new tax bill that significantly alters key deductions. The primary changes discussed are the increased SALT deduction cap and new limitations on charitable giving that will take effect next year.

These legislative changes are the primary driver for the year-end financial planning advice offered, creating both opportunities for tax savings and potential pitfalls for the unprepared.

Strategic Charitable Giving

The episode details advanced strategies for charitable donations, such as 'bunching' multiple years of contributions into one and using donor-advised funds. This is framed as a critical lever for tax reduction, especially in light of upcoming rule changes that will make deductions less valuable.

For philanthropically inclined high-net-worth individuals, understanding these strategies is crucial to maximize both their charitable impact and their tax benefits before the rules become less favorable.

Proactive and Continuous Tax Management

A core message is that tax planning should be a year-round, multi-generational activity, not just a last-minute scramble in December. This includes continuous tax-loss harvesting and strategically timing income and deductions across tax years.

This theme reframes tax management from a reactive compliance task to a proactive wealth-building strategy, emphasizing that consistent attention can yield significant long-term financial benefits.

Optimizing Tax-Advantaged Accounts

The conversation covers maximizing contributions to accounts like 401(k)s, HSAs, and IRAs. It highlights specific strategies like the 'mega backdoor Roth' and analyzes the impact of the 2026 rule change requiring catch-up contributions to be Roth.

Understanding the nuances and evolving rules of these accounts is essential for effective long-term retirement and healthcare savings, as they offer the most powerful tax deferral and tax-free growth opportunities.

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Topics

Tax Planning Year-End Planning SALT Deduction Charitable Giving Donor-Advised Funds Tax Law Retirement Accounts 401(k)Roth IRA HSA (Health Savings Account)Tax-Loss Harvesting Direct Indexing Capital Gains Equity Compensation Qualified Business Income (QBI)

Processed Apr 15, 2026 yt-dlp + mlx-whisper + Gemini