FAQ: Your Tax Season Questions, Answered

Tax season always seems to show up faster than expected. Between work, family, and easing back into your routine, it can be tough to pause and take stock of your financial picture. This FAQ brings together the questions we hear most often so you can enter 2026 with more clarity and confidence.

1. What should I review first as I start tax planning?

Start with a complete look at your income. This includes more than your salary: 

• Bonuses 
• RSUs and other equity compensation 
• Dividends and interest 
• Capital gains on sales of investments 
• Business or side–hustle income 

If you had equity vest or received a large bonus, your income may fall into a different tax bracket. Your employer may withhold taxes on equity vests at a lower percentage than your tax bracket.  

If your income exceeds $200,000 (single) or $250,000 (married filing jointly), you may be subject to an additional 3.8% Net Investment Income Tax (NIIT). 

Understanding this earlier may help reduce surprises next spring. It may also be helpful to review potential deductions as part of your overall planning, such as: 

• Charitable contributions 
• Medical expenses 
• Mortgage interest 
• State and local taxes 

If you had significant medical expenses, a portion may be deductible based on your AGI. And if you have carryover losses from 2025, they may help offset gains in 2026.

2. How much can I contribute to retirement accounts in 2026?

Here are the 2026 contribution limits: 

• 401(k): up to $24,500 (or $32,500 if you’re 50 or older and $35,750 if you are age 60-63) 
• IRA: up to $7,500 (or $8,600 if you’re 50 or older) 
• HSA up to $8,750 (family) or $4,400 (individual), including employer match 

If cash flow allows, contributing earlier in the year gives your dollars more time in the market. However, be aware if your employer matches only in the pay periods that you contribute. 

3. I have RSUs and other equity. What should I pay attention to?

Equity can be a great wealth builder, but it brings tax considerations. Review your vesting schedule and decide whether to: 

• Be sure to save documents you receive related to RSU vests, as the cost basis for vested RSUs is the fair market value (FMV) of the shares on the day they vest multiplied by the number of shares. You will need this value for your income taxes in the year in which you sell the shares so that you only get taxed on the difference between the selling price and the cost basis. 
• Some employees choose to sell shares at vesting to increase liquidity and diversify their holdings. Hold them if they support your long-term goals. Be aware that holding for at least one year gives you more favorable tax rates on capital gains. 

Companies typically withhold 22 percent on RSU income. If you’re in a higher tax bracket, that may not cover what you owe. Planning ahead can prevent an unexpected bill later.

4. Should I start planning now if I have a major transaction coming up?

Yes. Timing can significantly affect your tax outcome. A few examples: 

• Real estate purchase: Mortgage interest and property tax deductions can influence cashflow planning. 
• Earlystage equity or companies heading toward an IPO: Ask whether an 83(b) election is appropriate. This election must be filed within 30 days of the grant date. 
• Business sale: Qualified Small Business Stock (QSBS) may allow eligible noncorporate taxpayers to exclude QSBS gain, subject to a perissuer cap generally equal to the greater of $10 million (or $15 million for certain QSBS issued after July 4, 2025) or 10× the taxpayer’s adjusted basis, if all Section 1202 requirements are satisfied.

5. What are the most tax–efficient ways to give to charity?

If charitable giving is part of your plan, consider: 

• Donor-Advised Funds (DAFs): Contribute appreciated stock to receive a deduction now and decide later where to direct funds. 
• Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate up to $111,000 directly to a charity from your IRA without paying taxes on the distribution. 
• Bunching: Combine multiple years of charitable gifts into one to exceed the standard deduction threshold. 
• Donating low-cost basis, long-term appreciated stock directly to charity avoids capital gains tax on the appreciation and allows a deduction for the full fair market value.

6. Do I need to adjust my withholding or estimated payments?

If you received a raise, bonus, or RSU vesting, your tax picture may have shifted. Reviewing your W4 or quarterly payments early helps you avoid penalties and keeps things running smoothly. For high–income earners and business owners, even quarterly payments can support steady cash flow. You can use the IRS Tax Withholding Estimator tool to guide changes to your paycheck withholding.

7. Should I revisit my estate or trust plans this year?

If anything has changed in your life — relationships, assets, business interests, inheritances — it’s time for a review. 

For 2026, the annual gift tax exclusion is $19,000 per recipient, which may allow you to transfer assets without triggering gift tax, subject to IRS rules.

8. Are there investment–related ways to optimize taxes? 

Tax-loss harvesting is a simple and effective way to lower taxable gains. For example: 

If you harvest losses this year, you can offset capital gains on sales of investments. You can reinvest in similar assets to maintain diversification, as long as you don’t buy back the same investment

9. What advanced tax strategies might apply to me?

Depending on your goals and income, you might explore: 

• Roth conversions: May allow future earnings to grow tax–free and reduce the amount of required minimum distributions. 
• Opportunity Zone Funds: Can help defer or reduce capital gains if requirements are met. 
• Section 199A deduction: Currently allows eligible business owners to deduct up to 20 percent of qualified business income. In 2026, the deduction begins to phase out at taxable income threshholds of $203,000 for single filers and $406,000 for married filing jointly.

10. Should I work with an advisor or CPA?

Tax planning can be complex. An advisor and CPA can help you coordinate timing, optimize your strategy, and avoid missed opportunities. A little preparation now can create a much smoother tax season next year. If you’re interested in learning more about how a holistic financial advisor can integrate taxes into your overall plan, reach out to our team.  

This content is for informational and educational purposes only and should not be construed as individualized advice or a recommendation for any specific product, strategy, or course of action. Brighton Jones, its affiliates, and employees do not provide personalized investment, financial, tax, or legal advice through this communication. This material is not intended to, and does not, create a fiduciary relationship under ERISA or any other applicable law. For individualized advice tailored to your specific circumstances, please consult with your adviser.