Considerations for Taxes before April, and beyond.

As we approach tax season, it is not too late to think about tax mitigation strategies for your 2025 tax return and implement changes for 2026.

Before April 15, 2026, consider the following:

1. Individual Retirement Account (IRA): You have until April 15, 2026, to contribute up to $7,000, and for those 50+, you are able to contribute up to $8,000. Some or all of the contribution may be tax deductible and therefore lower your taxes. Bonus, it helps build your retirement savings.
2. Roth IRA: You can contribute to a Roth IRA, but you must meet Modified Adjusted Gross Income requirements (below $165,000 for single/$246,000 for joint filers). This will not lower your taxes but will help build your retirement savings. Bonus, the money grows tax free, so future qualified withdrawals have no taxes or penalties, or be subject to required mandatory withdrawals (RMDs) in your lifetime.
3. Health Savings Account (HSA): If you were enrolled in an HSA-qualified plan last year, you can still make your maximum annual contribution of $4,300 for an individual/$8,550 for a family, for qualified medical expenses. You have up to $1,000 in annual catch-up contribution if you are 55+.

Before December 31, 2026, consider for the following for your 2026 taxes and beyond:

• Employer Sponsored Retirement Plans: Maximize your contributions to your retirement plan at work and take advantage of any company match. For example, in a 401-K, you can save up to $24,500 this year, with an $8,000 catch up contribution for those 50+. If you are ages 60-63 you may be able to contribute a catch-up contribution of $11,250. Consult your plan administrator or tax professional for the maximum allowed for your type of plan.
• Tax-free investments: This strategy may be appropriate for investors looking for tax-free cash flow. Some investments (i.e. interest from tax-free municipal bonds) may be exempt from federal taxation. Not all bonds are created equal; it is important to understand the specific details of an individual bond before purchasing. Consult with an investment professional and tax professional to understand how a bond is rated and taxed for your personal situation.
• Tax Loss Harvesting: In a taxable investment account, this strategy involves selling securities (i.e. stocks) at a loss to offset any capital gains from the sale of securities with a gain. Additionally, you can deduct up to $3,000 of net capital losses against your ordinary income. Additional losses accrued can be “carried forward” to future tax years. Consult with an investment professional and tax professional to better understand how this strategy may apply to your personal situation.
• Charitable donations/Donor Advised Funds: Donations made during the tax year can also contribute to lowering one’s taxable income. Additionally, you can set up your own Donor Advised Fund (DAF), a “personal charity” that you can make a larger contribution to in this tax year to fund future charitable donations. Funding your DAF with highly appreciated securities is a double win—it eliminates your tax consequence on the capital gains, and your DAF enjoys the full value of the donation, tax-free. Please consult with a tax professional regarding tax rules and how they apply to your personal situation.

The Krause Collective is full-service financial services team that offers individual investors, families and business owners the resources needed to help meet your financial goals and estate considerations. If you would like to get the conversation started on how we can help with these and other wealth strategies, please give us a call at 425-712-7309, or visit our website at krausecollective.com to learn more.