4 Smart Tax Moves to Make Before Filing

February is often viewed as a month for gathering documents, but for the discerning taxpayer, it is also a critical window for proactive planning. In 2026, individual tax returns are more complex than in prior years following the passage of the One Big Beautiful Bill Act (OBBBA), which introduced several temporary deductions and modified key thresholds affecting how income is calculated.

Taking a few deliberate steps before filing can help ensure you are navigating this new landscape thoughtfully rather than reactively.

1. Identify New “Above-the-Line” Deductions

One of the most meaningful changes under the OBBBA is the introduction of several temporary deductions that reduce Adjusted Gross Income (AGI). Because these deductions are taken “above the line,” they are available regardless of whether you itemize or take the standard deduction.

Key provisions include:

• Auto Loan Interest: Taxpayers may be eligible to deduct up to $10,000 annually in interest paid on loans for qualifying new personal-use vehicles. To qualify, the vehicle must be newly purchased (not used), assembled in the United States, and the taxpayer must be the original owner. This deduction is subject to income-based phaseouts, making eligibility dependent on overall earnings.
• Qualified Overtime and Tip Income: Certain workers may deduct a portion of qualified overtime compensation and reported tip income, subject to statutory caps and income thresholds. These deductions rely on proper employer reporting, so reviewing Form W-2 accuracy when received is essential.
• Charitable Contribution Deduction for Non-Itemizers: Beginning in 2026, taxpayers who take the standard deduction may claim an above-the-line charitable deduction of up to $1,000 ($2,000 for joint filers). Contributions to donor-advised funds and certain private foundations are excluded.

Each of these provisions is temporary and currently scheduled to expire after the 2028 tax year. Understanding how they interact with your income profile can help you determine whether they meaningfully reduce your taxable income during this limited window.

2. Revisit the Decision to Itemize

For many households, the $10,000 cap on state and local tax (SALT) deductions made itemizing impractical in recent years. In 2026, however, the SALT cap has increased to $40,400, significantly altering the calculus for taxpayers in higher-tax jurisdictions.

If your state and local taxes, mortgage interest, and charitable contributions now exceed the 2026 standard deduction ($16,100 for individuals or $32,200 for married couples filing jointly), itemizing may once again be advantageous.

That said, itemizers should be aware of a new limitation on charitable deductions. Beginning in 2026, only charitable contributions exceeding 0.5% of AGI are deductible when itemizing. For example, a taxpayer with $200,000 of AGI would need to donate more than $1,000 before charitable deductions begin to reduce taxable income. This floor increases the importance of timing and structuring charitable gifts thoughtfully.

3. Review Your Tax-Loss Carryforwards

If you realized investment losses in prior years, those losses may still provide future tax benefits. Capital losses can offset capital gains dollar for dollar, and if losses exceed gains, up to $3,000 of excess loss may be applied against ordinary income each year.

Any unused losses can be carried forward indefinitely. Confirming that these carryforwards are correctly reflected on your return ensures they remain available as a hedge against future gains.

4. Maximize Prior-Year HSA and IRA Contributions

Even though the calendar has turned to 2026, you generally have until the tax filing deadline to make contributions that apply to the 2025 tax year.

For 2025:

• HSA contribution limits are $4,300 for individual coverage and $8,550 for family coverage, with an additional $1,000 catch-up contribution available for those age 55 and older.
• Traditional IRA contribution limits are $7,000, with a $1,000 catch-up contribution for individuals age 50 and older.

These contributions can reduce taxable income for 2025 and serve as a final planning lever after year-end, provided eligibility rules are met.

The Bottom Line

The 2026 tax season introduces more flexibility and more decision points. New above-the-line deductions, a higher SALT cap, and revised charitable rules mean that strategies which were ineffective in recent years may once again deserve attention.

Many of the OBBBA’s provisions are temporary, creating a limited window during which taxpayers can benefit from higher thresholds and expanded deductions. Reviewing these changes early and in context can help ensure compliance while avoiding missed opportunities.

Working with a qualified tax professional can provide clarity around how these rules apply to your specific situation and help ensure that new deductions and reporting requirements are handled accurately.

At Abri, we believe that clarity is the ultimate luxury. If you have questions about how recent tax law changes affect your planning, we are here to provide steady, independent guidance.

Sources

https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

https://taxpolicycenter.org/briefing-book/how-did-tcja-change-standard-deduction-and-itemized-deductions

https://bipartisanpolicy.org/explainer/salt-deduction-changes-in-the-one-big-beautiful-bill-act/

This information is provided as general information and is not intended to be specific financial guidance.  Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.