Retirement Savings and Your 2026 Tax Bill: What You Can Still Do

If you’re looking for ways to reduce your tax bill for 2026, retirement accounts are one of the most powerful tools available, and unlike most tax strategies, the window to take action is still wide open.

Here’s what you can still do right now to potentially lower what you’ll owe next April.

Traditional IRA: The Simple Option

A traditional IRA lets you contribute up to $7,500 in 2026 ($8,600 if you’re 50 or older), and those contributions may be fully deductible depending on your income and whether you or your spouse have access to a workplace retirement plan.

If you’re eligible for the deduction, every dollar you contribute reduces your taxable income by a dollar.

Roth IRA: Growing Tax-Free

A Roth IRA doesn’t give you a tax deduction now, but it grows completely tax-free, and qualified withdrawals in retirement are tax-free as well. If you expect to be in a higher tax bracket in retirement than you are today, this is often the better long-term choice.

Income limits apply for Roth IRA contributions. For 2026, the ability to contribute phases out at higher income levels. A CPA can help you determine which account type makes the most sense given your situation.

For Business Owners: The Big Options

If you’re self-employed or own a business, the retirement savings options available to you are significantly more generous than traditional IRAs.

A SEP-IRA allows contributions up to 25% of net self-employment income, with a maximum of $72,000 for 2026. A Solo 401(k) allows both employee and employer contributions, making it possible to shelter even more. A SIMPLE IRA is another option for businesses with employees.

These accounts can reduce your taxable income dramatically, and for business owners, they’re one of the single most effective tax strategies available.

HSA: The Triple Tax Advantage

If you’re enrolled in a high-deductible health plan, a Health Savings Account (HSA) is worth understanding. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.

That’s three tax advantages in one account, which is why many financial planners describe it as the best savings vehicle most people don’t take full advantage of.

What Not to Do

Don’t make retirement account decisions without considering the full picture. Early withdrawal penalties, income limits, and the interaction between different account types can make the right answer for one person the wrong answer for another.

The goal is to use these accounts strategically, not just to reduce this year’s taxes, but to build a retirement that actually supports the life you want to live.

Let’s Run the Numbers

If you haven’t maxed out your retirement contributions this year, there’s still time. And there’s still time to make a significant impact on your 2026 tax bill. Schedule a mid-year conversation, and we’ll look at your specific situation and identify the best moves for you.

To schedule an appointment via phone or Zoom, please call (828) 570-5760 or email Lauren@DeniseStubbsCPA.com.

If you wish to meet in person, please note we have very limited availability - call our office to discuss. Thank you!

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This blog post is provided for educational purposes only and does not constitute personalized financial, tax, or investment advice. Tax laws are complex, change frequently, and vary based on individual circumstances. Before implementing any strategies discussed, please consult with qualified financial advisors, tax professionals, or CPAs who can assess your specific situation. This content should not be relied upon as a substitute for professional consultation.