Tax Strategies That Matter More Than Deductions in 2026

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Tax deductions get most of the attention during tax season. While tax deductions can reduce your taxable income in a given year, certain tax strategies can have a much bigger long-term impact on your finances. Decisions around income timing, retirement contributions and tax-efficient investing can impact not only your tax bill today but also your finances down the road. 

Here are some expert-recommended tax strategies that matter more than deductions in 2026.

Also see six Big Beautiful Bill tax changes that will benefit the middle class.

Manage Income Flow

“For many higher earners and business owners, managing income flow can move the needle far more than any individual write-off,” Elizabeth Hale, founder and CEO of eeCPA, a woman-founded and owned full-service CPA firm based in Scottsdale, Arizona, wrote in an email.

This tax-saving strategy involves accelerating expenses and deferring income. For example, according to J.P. Morgan, businesses will often purchase supplies or equipment before Dec. 31 to deduct those expenses from taxable income. And when expecting payments, businesses may delay sending invoices until January. In this case, income hits accounts the following year and can potentially reduce taxable income for the current tax year.

“We are spending a lot of time with clients on timing … when income is recognized, when gains are realized, and how those decisions affect not just this year’s tax bill but also future brackets,” Hale explained.

Even taking advantage of deductions to improve cash flow involves strategy. For example, in 2026, a new deduction for charitable contributions is available to non-itemizers. For households that typically take the standard deduction, this change makes the timing and method of charitable giving more relevant than in prior years. Tracking cash donations and coordinating them with income levels can help confirm that the deduction actually delivers a tax benefit.

“Even taxpayers who take the standard deduction can deduct up to $1,000 in charitable contributions ($2,000 for married filing joint couples) starting in 2026. The contributions must be cash, check or credit card and made to a qualifying public charity,” said Jason Stanfield, Ph.D., CPA, an associate professor of accounting at Ball State University and a member of the American Accounting Association.

Retirement Planning

Hale also pointed out that retirement planning is another area where the rules matter more than people expect. 

“With recent changes under SECURE 2.0, the mix between Roth and pre-tax contributions deserves a closer look, especially for those nearing higher income thresholds,” Hale explained. “It is no longer just about putting money away. It is about understanding when that money will be taxed and how it fits into a longer-term plan.”

Tax-Loss Harvesting

Tax-loss harvesting is a strategy often used toward the end of the year.

“A review of your investment portfolio toward the end of the tax year can be made for the current capital gains you have realized for the year and any current investments you might consider selling at a loss before the end of the year to produce capital losses to offset the potential capital gains taxes,” explained Mark Luscombe, principal analyst for Wolters Kluwer’s Tax and Accounting Division North America. 

Tax-loss harvesting means intentionally selling certain investments that have declined in value to help reduce taxes owed elsewhere. When an investment is sold at a loss, that loss can be used to offset capital gains from investments that performed well during the year. 

“Ending the year with a $3,000 net capital loss permits that $3,000 to be offset against other taxable income for the year,” Luscombe explained.

Opportunity Zones

According to Hale, they’re seeing renewed interest in Qualified Opportunity Zones (QOZ) in 2026, especially from investors sitting on concentrated capital gains.

According to the IRS, a QOZ is an economically distressed property where new investments may be eligible for preferential tax treatment under certain conditions. QOZs were introduced in President Trump’s 2017 Tax Cuts and Jobs Act and have transitioned to the permanent OZ 2.0 framework under the Big Beautiful Bill, according to Thomson Reuters.

“With portions of the original program sunsetting and potential changes ahead, timing has become more important than ever,” Hale said. “The value is not just in deferring taxes, but in coordinating exits, reinvestment windows and holding periods so taxes do not quietly erode returns.”

However, Hale also pointed out that Opportunity Zones are not a fit for everyone.

“Where investors get into trouble is treating them as a last-minute tax move instead of a true investment decision. When they work, they are part of a broader income and investment strategy and the underlying deal stands on its own,” Hale explained. “In 2026, the smartest tax strategies are proactive, coordinated, and built around the full financial picture, not just the tax return.”

Health Savings Account

According to Luscombe, health savings accounts (HSAs) offer better tax advantages than retirement accounts. Unlike 401(k)s or IRAs, HSAs combine multiple tax benefits into a single account.

“They offer a tax deduction for contributions, tax-free accumulations and tax-free distributions,” he explained. “Maximizing contributions to HSAs is therefore a very advantageous tax strategy.”

This means money contributed to an HSA reduces taxable income today, grows without being taxed over time and can be withdrawn tax-free when used for qualified medical expenses.

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