With 2025 returns filed or extended, the Weekend Journal's Tax Report does the most useful thing a tax column can do: it resets the table for the coming year. Laura Saunders has the calendar laid out, and a handful of the numbers matter materially for our demographic.
The 2026 Numbers You Should Know
Four Things That Shift Materially For Our Book
1. The 403(b) Cap Went Up — Update Payroll Now, Not In December
If you are a CalSTRS/CalPERS teacher or public employee contributing to a 403(b), your payroll deduction does not auto-increase with the IRS limit. You have to walk into HR (or the payroll portal) and raise it. The cost of waiting until December is that you need a 10x higher deduction in the last two paychecks to hit the new cap. Do it in April, spread it over the year.
2. The Roth Backdoor Window Is Still Open
The "backdoor Roth" (nondeductible IRA + immediate conversion) survived another legislative cycle. For high-earning households phased out of direct Roth contributions, this is still a $7,500 per spouse lever and 2026 is the right year to use it. Watch the pro-rata rule if you have pre-tax IRA balances.
3. Qualified Charitable Distributions (QCDs) Are Bigger
For clients age 70½+, the 2026 QCD limit is now $108,000 per individual. For retirees who are giving anyway, QCDs directly from an IRA beat writing a check from a taxable account on nearly every metric — they satisfy RMDs, they reduce AGI, and the charity gets the same amount.
4. 529-to-Roth Rollovers Clarified
The SECURE 2.0 529-to-Roth rollover (up to $35,000 lifetime) is operational this year. For parents whose kids outgrew the 529 or chose a cheaper school, there is a planning window opening. Rules are strict: 15-year account age, five-year seasoning on contributions, annual Roth limit caps the rollover. But it is real money that used to be trapped.
Q2 Tax Planning Checklist
- Update 401(k)/403(b) contribution rate to hit $24,500 (or the 50+/60–63 catch-up). Fix it in April, not December.
- Backdoor Roth — if you're phased out of direct Roth, make the nondeductible IRA contribution now.
- HSA — max it if you're on an HDHP. For most of our book, this is the single most under-used wrapper.
- QCDs — if you are RMD-eligible and charitably inclined, plan the full-year QCD plan now.
- 529-to-Roth — if you have an overfunded 529, check the 15-year clock and size the rollover for 2026.
- Capital gains harvesting — at records, there may be long-term gains to realize into the 0% bracket if your income qualifies. Pair with losses if available.
Bring your most recent paystub and 1099 forms to the Q2 review and we can set every dial correctly in one sitting.