“The hardest thing in the world to understand is taxes.”
Believe it or not, that quote comes from Albert Einstein, not one of your clients. Although you’ve probably heard one or two of them say this in a client meeting.
Tax planning in general has long been a powerful way for advisors to create long-term value for clients because it’s an area that impacts every plan, it’s confusing, and real guidance is far and few between.
Many advisors claim to offer tax planning, but what they provide is often just a brief year-end checklist.
Tax planning is all about helping clients make better decisions over time. It’s ongoing. It’s about being proactive, collaborative, and deeply connected to every part of your clients’ financial plan, from investments and retirement income to estate planning and legacy goals.
In 2026, considering recent legislation and changes, now is an ideal time to implement tax planning into your conversations. Here are seven core topics to explore in 2026.
#1: How Estate and Wealth Transfer Planning Impacts Tax Exposure in 2026
For many clients, estate planning represents the most significant potential tax exposure they’ll ever face, yet it’s often the least revisited part of the plan.
Advisors should regularly review whether estate documents, beneficiary designations, and liquidity strategies still reflect current laws and client intent. These conversations naturally lead to deeper discussions around family priorities, legacy goals, and long-term planning.
Essential details for 2026:
- Federal estate and gift tax exemption: $15M per individual / $30M per couple per the One Big Beautiful Bill Act (OBBBA)
- Annual gift tax exclusion: $19,000 per recipient (unchanged from 2025)
- Estate tax rate above the exemption remains 40%
What to explore with clients:
- Lifetime gifting and use of annual exclusions
- Trust planning (for example, irrevocable life insurance trusts, dynasty trusts)
- Liquidity planning with life insurance
- Coordination with state estate/inheritance tax exposures
Related: The New $15 Million Era: How OBBBA Rewrites Estate Planning Strategies
#2: How Income Tax Brackets Shape Long-Term Planning
Understanding tax brackets and deductions is foundational, but the real opportunity lies in how income is timed over a client’s lifetime.
Advisors should help clients look beyond the current year and evaluate how income variability, retirement timing, or business events could impact long-term tax exposure.
2026 highlights advisors should factor in:
- Marginal tax rates remain at 10%–37%
- Top bracket begins at $640,600 (single) / $768,700 (married filing jointly)
- Standard deduction increases to $16,100 (single) / $32,200 (married)
- The Alternative Minimum Tax (AMT) exemption is $90,100 (single) and $140,200 (married), with phase-outs starting at specified levels
For many clients, even slight shifts in income timing can have a significant impact on lifetime taxes.
#3: When Roth Conversions Make Sense for Long-Term Tax-Free Income
Roth conversions offer the opportunity to lock in tax-free income growth, potentially reducing future tax exposure.
When you review a client’s plan, consider these questions:
- Does the client’s projected tax bracket trend higher in later years?
- How would an incremental conversion impact current-year taxes?
- Does the client’s Medicare or Social Security strategy interact with Roth timing?
- Is there cash available to pay conversion taxes without dipping into retirement accounts?
With future tax brackets and parameters stabilized by the OBBBA, the long-term value of tax-free income remains attractive.
#4: How to Create a Tax-Efficient Retirement Distribution Strategy
Once clients shift from accumulation to distribution, tax planning becomes about when and how they draw assets, not just how much.
Without a coordinated approach, required minimum distributions (RMDs), Social Security, and pension income can push clients into higher tax brackets over time. In 2026, with stabilized tax parameters and inflation-adjusted deductions, proactive withdrawal sequencing is especially important.
Advisors can add value by:
- Sequencing withdrawals across taxable, tax-deferred, and tax-free accounts
- Coordinating RMDs with other income sources
- Using qualified charitable distributions (QCDs) where appropriate
#5: Tax Planning Strategies for Business Owners
Business owners and high-income clients face complex tax issues that span both personal and business decisions. For advisors, the opportunity lies in coordinating these moving parts rather than treating them separately.
In 2026, preserved tax parameters under the OBBBA—including the 20% qualified business income (QBI) deduction for eligible pass-through entities—create stability, but also require careful planning around income timing, compensation, and exit strategies.
Advisors can add meaningful value by:
- Structuring and timing compensation efficiently
- Integrating succession or exit planning with personal tax goals
- Aligning business income with long-term retirement strategies
#6: Charitable Giving Strategies That Align Taxes and Values
Charitable planning allows advisors to connect a client’s values, legacy goals, and tax strategy in one conversation. In 2026, even with a historically high estate and gift tax exemption, structured giving remains one of the most effective ways to reduce taxable income while reinforcing what matters most to clients.
Rather than focusing solely on how much clients give, advisors can add value by helping them consider how and when those gifts are made.
Common planning opportunities include:
- Using donor-advised funds (DAFs) and gift “bunching” to optimize deductions
- Exploring charitable remainder trusts for income and legacy planning
- Coordinating charitable strategies with estate and retirement income plans
The annual gift exclusion remains $19,000 per recipient in 2026, offering continued flexibility for clients who want to give strategically over time.
Related: 5 Philanthropic Giving Strategies for High-Net-Worth Clients
#7: Why Coordinated Tax and Legal Planning Is Critical in 2026
The most effective tax plans aren’t built in silos.
Outcomes still depend on how effectively financial advisors, CPAs, and estate attorneys collaborate. Misaligned assumptions—or outdated projections—can quietly undermine an otherwise solid plan.
Advisors add value by acting as the central coordinator, ensuring that income planning, estate strategies, and tax assumptions are aligned.
High-impact coordination practices include:
- Annual planning reviews involving all key professionals
- Shared assumptions across tax, estate, and financial projections
- Ongoing updates as IRS guidance and inflation adjustments change
Making Tax Planning a Year-Round Advantage
In 2026, effective tax planning is all about ongoing, coordinated conversations that help clients make better decisions over time.
By focusing on these seven core areas, advisors can proactively reduce tax exposure while aligning every part of a client’s financial plan.
Not sure you have the expertise you need to lead these conversations? Find yourself a partner who does. The strongest independent advisors don’t do it alone; they leverage specialized expertise to guide clients through advanced planning with greater confidence.
