The episode details methods for maximizing the tax efficiency of charitable donations. This includes bunching several years of contributions into a single year to exceed the standard deduction and using donor-advised funds (DAFs) to time the deduction while maintaining a steady stream of giving.
The conversation centers on recent tax law changes, particularly the increase of the State and Local Tax (SALT) deduction cap to $40,000 and its income-based phase-outs. It also looks ahead to 2026 changes, such as a new floor for deductible charitable gifts and limits on itemized deductions for top earners.
The discussion advocates for a continuous, thoughtful approach to managing investment gains and losses, rather than a last-minute December activity. Strategies include deferring Q4 gains into the next year to allow more time for tax-loss harvesting and employing state-specific tactics like a "gains harvest" in states like New Jersey that disallow loss carryforwards.
The episode covers maximizing contributions to accounts like 401(k)s, IRAs, and Health Savings Accounts (HSAs). It highlights advanced strategies like the mega backdoor Roth 401(k) and notes a key change in 2026 requiring catch-up contributions for those over 50 to be made on a Roth (after-tax) basis.
The conversation touches on specific opportunities for small business owners, with a focus on the Qualified Business Income (QBI) deduction. It stresses the importance of meeting specific wage and other requirements to avoid having this valuable 20% pass-through income deduction significantly reduced or eliminated.
Keep pulling the thread on Bill Artseronian.