Tax Season Is More Than a Deadline — It’s a Planning Opportunity

Tax season isn’t just about filing returns and getting a refund. It’s one of the best opportunities each year to identify strategies that can reduce lifetime taxes and strengthen your overall financial plan.

Here are a few key areas to review before you file:

Don’t Miss Commonly Overlooked Items

• Qualified Charitable Distributions (QCDs): If you gave directly from your IRA, remember that your Form 1099-R from the IRA custodian does not show that the funds went to charity. If reported incorrectly, you could pay tax on money that should be excluded.
• 529 Contributions: In Michigan, contributions may reduce state taxable income by up to $5,000 (Single) or $10,000 (Married Filing Joint). Many other states offer deductions or credits as well.
• IRA & Roth Contributions: It’s important to report contributions you made properly — especially for those using backdoor Roth strategies. Make sure the custodian has them reported for the right tax year, and if you are utilizing a back-door Roth strategy, that Form 8606 is correctly filed with the return showing a non-deductible IRA contribution.
• Cost Basis: Investments with realized gains sometimes don’t have cost basis reported on the 1099. This may require adjusting based on when the asset was acquired to ensure you are not paying more tax than required.
• Itemized Deductions: Be sure to check if your itemized deductions exceed the standard deduction. The State and Local tax and Property Tax deduction also increased from a max cap of $10,000 in 2024, to up to $40,000 in 2025 for most filers, so this alone may help taxpayers jump over the standard deduction hurdle.

You May Still Be Able to Improve Last Year

Before the deadline, eligible clients may still be able to:

• Fund a Traditional or Roth IRA: maximum $7,000 if under age 50, $8,000 if over age 50 (must have earned income and income limits may impact eligibility for tax deduction)
• Fund a SEP IRA: 25% of employee compensation, up to $70,000 (there are some eligibility restrictions)
• Contribute to an HSA: max $4,300 for self-only coverage or $8,550 for family coverage

These strategies all support long-term tax-efficient growth. Even modest contributions can compound meaningfully over time.

The Bigger Question: What Should We Adjust for 2026?

Instead of treating taxes as history, we use them as a planning tool.

Important conversations with your financial advisor include:

• Are you maximizing 401(k) contributions?
• Should contributions be Roth or pre-tax?
• Does your 401(k) plan offer after-tax contributions? (Mega back door Roth)
• If age 65+, are you near Medicare IRMAA thresholds? (>$109K Single, $218K MFJ)
• If age 65+, are you getting the new senior deduction? (up to $12,000 for MFJ)
• Is there a more tax-efficient way to give to charity? (e.g., donor advised funds, QCD’s)

Final Thoughts: Make Taxes Part of Your Wealth Strategy

Tax season is one of the few times each year when your entire financial picture is organized in one place.

Used properly, it can:

• Reduce lifetime tax liability
• Improve retirement income efficiency
• Enhance charitable impact
• Strengthen wealth transfer plans
• Increase long-term net worth

The most effective results happen when you start planning early — ensuring your upcoming tax return will support your broader financial plan, not just this year’s filing requirement. Have a question about your tax situation? Reach out to our team of financial professionals by contacting help@bloomadvisors.com, or calling our office at 248-932-5200.