Taxes

Here’s a link to a youtube video below between Ben Carlson & Mike Piper discussing the topic of Soc Sec going bankrupt. For those who may not recognize the names, Carlson is part of Ritholz Wealth mgt and author of “A Wealth of Common Sense” email blog. Mike Piper is a CPA, author of the “Oblivious Investor” email blog and creator of the Open Social Security calculator (https://opensocialsecurity.com/).  Here’s the url to their

I love a New Year. It’s a great time to evaluate your current situation and make changes as necessary. Here’s what I’ve been up to recently:

1. We adjusted the tax withholding for our Social Security payments. Current withholding options are 0%, 7%, 10%, 12% and 22%. We reduced our withholding from 15% to 7% since our income is lower than when we were working and refunds were getting too large.

2. We opened a new checking account with a $500 sign-up bonus and couldn’t be happier with the improved service.

I get a lot of questions from W-2 employees asking, “How can I save money on taxes?”
Many people know that business owners have a lot of flexibility to lower their tax bill, but what about W-2 workers? I’ll skip some of the more “obvious” strategies, like:

401(k)
Backdoor Roth
HSA/FSA

Here are some other ones you might want to think about:
 
Commuter benefits
Some companies offer pre-tax commuter benefits that can be used for transportation expenses such as transit passes or parking.

I received an alert from Fidelity today showing new tax issues to consider when planning a Roth conversion.
Essentially, the 2025 tax act added new benefits such as the senior tax deduction and higher limits on SALT deduction. Both have income limits based on MAGI income and thus both could affect the short-term value of a Roth conversion. The car loan interest deduction may also be a factor.
Could there be a short-term loss with a conversion? 

Currently our rental income exceeds 100% of our discretionary and non-discretionary annual expenses.  We are at the mercy of higher tax brackets and Irmma. I am 2 years from RMD’s, my spouse is 3 years away.  Should the market simply stay flat our RMD’s (both) will cover 100% of our annual expenses. We have been very fortunate.
Our IRA’s are in. Index funds, spread across large and small in an 84/16 stock/bond mix. Stocks are 46/38 between domestic and foreign in an approx 2/3 large cap and 1/3 smaller cap for both.

THE IRS RECENTLY announced inflation adjustments for the tax year 2026.
2 quick changes:

Standard deduction

For single taxpayers, the standard deduction rises to $16,100 for 2026, an increase of $350 from 2025.
For married couples filing jointly, the standard deduction rises to $32,200, an increase of $700 from tax year 2025.

Capital Gains Rates

For single taxpayers, long-term capital gains are taxed at 0% if the taxable income is up to $49,450 ($98,900 for married couples filing jointly).

I don’t know about your state, but in Ohio, if you drive a hybrid or electronic vehicle, expect to cough up between $100 and $200 extra for license plates, in order to offset the loss of gas tax revenue. Gas tax revenue helps keep our roads in good condition, so it’s only fair that vehicles using less gas, or no gas at all, do their part to maintain the roads.
Even before Henry Ford invented the assembly line,

At the risk of red down arrows, enough complaining about IRMAA and writing about strategies to lower or avoid those premiums.
The median income for retirees age 65+ is $47,000 – $55,000 annually. 
The median HOUSEHOLD income at all ages is about $84,000
IRMAA premiums start at a single person income of $109,000.

If you are retired and required to pay IRMAA premiums, you are doing quite well. As the saying goes,

 
In some situations thousands of tax dollars can be saved by using the married filing separate filing status. However, doing so can trigger a larger income-related monthly adjustment amount (IRMAA) to your Medicare premium.
For example, the monthly adjustment for a single taxpayer with modified adjusted gross income of $109,000 is $81.20 per month. A married taxpayer filing separately with the same income will have a monthly adjustment of $446.30. In that situation it will most likely be better to file a joint tax return and pay the extra income tax.

This discussion (at least the first 2 points) recently came up on the Retirement and IRA Show podcast and I was curious how you all view it.
I suspect most of us view IRMAA on the cost side of the ledger, as either a tax or a fee that is applied, in cliff fashion, to that one extra dollar as defined by our federal government.
The discussion on the show opened my mind to the fact that Medicare has a base cost and unless you are making a ton of income,

BEFORE THE YEAR ENDS, I wanted to cover a great concept – tax-loss harvesting. It’s a strategy to lower your tax liability by selling investments and repurchasing a similar one. The loss can be used to cancel out gains from other investments, which helps reduce the taxes you owe. Or you can use up to $3,000 of those losses each year to lower your taxable income if you don’t have any gains.
Here’s the key goal of the tax-loss harvesting strategy:
Swap assets into similar,

BUSINESS OWNERS HAVE far more control over their tax bill than W-2 employees. But only if you know how the rules actually work. 
The tax code is structured to reward self employment, business investment, and retirement saving, yet many business owners leave significant money on the table simply because they are unaware of all the strategies.
If you are eligible, a Solo 401(k) plan can be an effective way to lower your taxes or shield your investments from future taxation.

THE IRS JUST provided some guidance on how the tips and overtime deductions will work. I wanted to spend a few minutes going over the details so that you can learn how it would be reported on your taxes and share this with friends and family.
Overtime
As a reminder, the OBBBA created Section 225, which allows you to deduct qualified overtime compensation.
This deduction is capped at $12,500 per return ($25,000 for joint filers) and is subject to a phaseout based on modified adjusted gross income.

Today, 12/09/2025, the IRS issued Notice 2026-5 titled “Expanded Availability of Health Savings Accounts under the One, Big, Beautiful)Bill Act (OBBBA)“. This notice should not be confused with the proposed bill that Bogdan wrote about in an earlier Humble Dollar article on 11/27/2025.
The 2026-5 notice provides guidance on changes relating to health savings accounts (HSAs) that were enacted and these changes generally expand the availability of HSAs .
Key points of the notice-
Made permanent a safe harbor for the absence of a deductible for telehealth and other remote care services in existing law.

I am currently trying to convert as much of my wife’s traditional IRA to a Roth. I consider the 12% tax bracket the sweet spot as for every dollar after that the tax nearly doubles to 22%. Earlier this year I calculated what I think is the maximum income one can have for a couple 65+, married, filing jointly with no other complicating additional income, deductions, nor credits, and using the standard deduction. Some terminology may be incorrect.