Knowledge Base
Tax Planning Guides
Plain-English guides to federal and California tax rules that shape investment decisions: capital gains, AMT, QSBS, loss harvesting, charitable gifts, and 2026 changes from the July 2025 tax law.
68 guides
529 Plan Tax Strategies: Superfunding, Roth Rollovers, and K-12 Rules
529 earnings are federally tax-free for qualified education costs. In 2026, K-12 withdrawals can reach $20,000 a year; California differs.
Active vs. Passive Income: Material Participation and the Passive Loss Rules
Passive income comes from businesses you don't materially participate in and most rentals. Passive losses generally offset only passive income.
Alternative Minimum Tax (AMT) Planning
AMT is a parallel federal tax you pay when it exceeds regular tax. ISO exercises are the most common trigger; 2026 law changes widen its reach.
Annual Gift Tax Exclusion in 2026: Gift Splitting, 529s, and Trusts
In 2026 you can give $19,000 per recipient without using exemption or filing a gift tax return. The lifetime exemption is $15 million.
Backdoor Roth IRA: How It Works and the Pro-Rata Trap
A backdoor Roth is a nondeductible traditional IRA contribution converted to Roth. The pro-rata rule makes it taxable if you hold pre-tax IRA money.
Borrowing Against Crypto: Mechanics, Risks, and Taxes
A crypto-backed loan uses your coins as collateral for cash; a price drop can force a sale of the collateral, and lender failures have wiped out borrowers.
Bunching Charitable Deductions Under the 2026 Tax Rules
Bunching puts several years of giving into one year so itemized deductions beat the standard deduction, often using a donor-advised fund.
Capital Gains Harvesting (0% Rate Strategy)
Gain harvesting realizes long-term gains in low-income years at the 0% federal rate: 2026 taxable income up to $49,450 single or $98,900 joint.
Capital Gains Tax Rates for 2026: Brackets, NIIT, and Netting Rules
In 2026, long-term gains are taxed at 0% up to $49,450 single ($98,900 joint), 15% up to $545,500 ($613,700), and 20% above, plus possible NIIT.
Charitable Deduction Rules for 2026: AGI Limits, Records, and New Floors
Itemizers deduct gifts above 0.5% of AGI, within AGI limits; non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts in 2026.
Crypto Tax Planning: Lot Selection, Losses, Staking, and Form 1099-DA
The IRS treats crypto as property: sales and swaps realize gains, and staking rewards are income. The wash-sale rule doesn't apply to crypto in 2026.
Deferred Sales Trusts: How They Work and Why the IRS Scrutinizes Them
A deferred sales trust is a promoter-designed structure that tries to use installment-sale rules to spread gain. The IRS has not approved it.
Donor-Advised Funds: How They Work Under 2026 Tax Rules
A donor-advised fund takes an irrevocable gift now, gives a deduction that year, and lets you recommend grants to charities over time.
Earned vs. Unearned Income: Why the Difference Matters for Taxes
Earned income comes from work and carries payroll tax; unearned income comes from investments. The split drives IRA eligibility, credits, and surtaxes.
Education Tax Credits: American Opportunity vs. Lifetime Learning
The AOTC is worth up to $2,500 per student for four years; the Lifetime Learning Credit up to $2,000 per return. Both phase out at $80K–$90K single.
Electing S Corporation Status for an LLC: When the Numbers Work
An S corp election lets an LLC owner take a reasonable salary and receive remaining profit without self-employment tax, in exchange for added costs.
Equity Compensation Tax Strategy Checklist
ISOs, NSOs, RSUs, and ESPP shares are each taxed at different moments; knowing which you hold sets which tax planning choices you have.
Estimated Tax Payments: Who Owes Them, Due Dates, and Safe Harbors
If withholding won't cover your tax, quarterly estimates are due April 15, June 15, Sept. 15, and Jan. 15. Safe harbors avoid the underpayment penalty.
Expat Tax Planning: FEIE vs. Foreign Tax Credit, Treaties, and Moving Back
U.S. citizens abroad still file U.S. returns. The main tools are the FEIE ($132,900 for 2026), foreign tax credits, and treaties, each with trade-offs.
FBAR and FATCA: Reporting Foreign Accounts and Assets
U.S. persons file an FBAR if foreign accounts top $10,000 combined at any time in the year; Form 8938 applies at higher thresholds.
Filing a Tax Extension: What It Does and Doesn't Do
Form 4868 gives individuals six more months to file, to October 15, but not to pay; tax owed after the April deadline accrues interest and penalties.
Foreign Tax Credits: How They Work and Their Limits
The foreign tax credit reduces U.S. tax by income taxes paid abroad on the same income, limited to the U.S. tax on that foreign-source income.
Form W-4 and Tax Withholding: Getting Your Paycheck Withholding Right
Form W-4 tells your employer how much federal income tax to withhold. Update it after life or income changes so your refund or balance due stays small.
Gifting Appreciated Stock: A Tax-Smart Way to Give
Gifting appreciated stock passes your basis and unrealized gain to the recipient; giving it to charity avoids the gain. 2026 annual exclusion: $19,000.
Home Energy and EV Tax Credits After 2025: What Ended and When
The 2025 tax law ended the federal EV credits for vehicles acquired after Sept. 30, 2025 and the home energy credits after Dec. 31, 2025.
How a 1031 Exchange Works: Deadlines, Boot, and Trade-offs
A 1031 exchange defers tax on the sale of investment real estate if the proceeds buy like-kind property within strict 45- and 180-day deadlines.
How Cryptocurrency Is Taxed in the U.S.
The IRS treats crypto as property: disposing of it can trigger capital gain or loss, and crypto received for work or staking is ordinary income.
How Trusts Are Taxed: Grantor vs. Non-Grantor, DNI, and K-1s
Grantor trust income is taxed to the grantor. A non-grantor trust pays its own tax on retained income, and beneficiaries pay tax on what is distributed.
Inherited IRA Tax Strategy: The 10-Year Rule, Annual RMDs, and Timing
Most non-spouse heirs must empty an inherited IRA within 10 years; if the owner had started RMDs, annual withdrawals are also required in years 1–9.
Installment Sales (Section 453): How Seller Financing Spreads Out Gain
An installment sale lets a seller report gain as payments arrive rather than all in the sale year. Recapture, interest, and related-party rules apply.
IRS Audits: How They Start, How Long the IRS Has, and Your Rights
An IRS audit is a review of a return, usually by mail. The IRS generally has three years to assess more tax, and you can appeal disagreements.
Itemized vs. Standard Deduction in 2026: SALT, Charity, and the New Limits
For 2026 the standard deduction is $16,100 single and $32,200 joint. Itemizing helps only when deductions exceed it, and new 2026 limits apply.
Kiddie Tax Rules for 2026: Thresholds, Ages, and Custodial Accounts
In 2026 a child's unearned income above $2,700 is generally taxed at the parent's rate, up to age 18, or through 23 for full-time students.
Leaving California With Stock Options or RSUs: What the State Still Taxes
California taxes equity pay earned while you worked there, even after you move, using a workday ratio. Later appreciation follows your new residence.
Managing Taxes on Retirement Withdrawals
Which accounts you draw from each year, and how much, affects lifetime taxes and Medicare premiums; the aim is often steadier taxable income.
Marriage and Taxes: Filing Status, Marriage Penalties, and What to Update
Marriage changes filing status, brackets, and several thresholds. Couples with similar high incomes can face penalties in the top bracket, SALT, and NIIT.
Mega Backdoor Roth: Turning After-Tax 401(k) Money Into Roth Savings
A mega backdoor Roth uses after-tax 401(k) contributions, then converts them to Roth; in 2026 the total plan cap is $72,000 before catch-ups.
Moving to Another State: Domicile, Residency Tests, and Taxes
Moving does not end your old state's tax by itself. You need a new domicile, to stay clear of its day-count rules, and to watch income it can still source.
Net Investment Income Tax (3.8%) and the 0.9% Additional Medicare Tax
The 3.8% NIIT hits investment income above $200,000 single or $250,000 joint MAGI; the 0.9% Medicare tax hits wages above the same levels.
Opportunity Zone Exits: The 2026 Deferral Deadline and the 10-Year Rule
Gains deferred into pre-2027 Opportunity Zone funds become taxable on Dec. 31, 2026. Appreciation can be tax-free only after a 10-year hold.
Ordinary Income vs. Capital Gains: 2026 Rates and Rules
Ordinary income is taxed at 10% to 37%. Long-term capital gains on assets held over a year are taxed at 0%, 15%, or 20% in 2026, plus 3.8% NIIT.
Primary Residence Tax Benefits: Mortgage Interest, SALT, and the Home Sale Exclusion
Itemizers can deduct mortgage interest on up to $750,000 of debt and property taxes within the SALT cap; up to $250K/$500K of sale gain can be excluded.
QSBS Stacking Strategies: Gifts, Trusts, and Section 1045 Rollovers
QSBS stacking uses gifts to family members and non-grantor trusts so more than one taxpayer can claim the §1202 exclusion cap on the same company's stock.
Qualified vs. Ordinary Dividends: Tax Rates and Holding Periods
Qualified dividends are taxed at 0%, 15%, or 20%; ordinary dividends at regular rates up to 37%. Holding period and payer determine which applies.
Real Estate Professional Status: The 750-Hour Test and Rental Losses
Real estate professionals can treat rental losses as non-passive, but only with 750+ hours and over half their work time in real estate.
Rental Property and the Passive Loss Rules: How Rental Losses Get Used
Rental losses are usually passive: they offset only passive income until you sell, unless the $25,000 allowance or real estate professional status applies.
Rental Property Tax Deductions: What Landlords Can Deduct
Landlords can deduct ordinary rental expenses and depreciate the building over 27.5 years, but passive loss rules often limit how much reduces tax now.
Roth Conversion Ladder: How It Works for Early Retirees
A Roth conversion ladder converts pre-tax IRA money to Roth each year; each conversion can be withdrawn penalty-free after five tax years.
S Corporation Owners: Salary, Distributions, and Tax Planning
S corp owners pay payroll tax only on a reasonable salary, not distributions. Salary level also drives retirement contributions and the QBI deduction.
Schedule K-1s Explained: Timing, Phantom Income, and Hidden Costs
A K-1 reports your share of a partnership's or S corporation's income. You owe tax on that share even without cash, and late K-1s often mean extensions.
Self-Employment Tax: How It's Calculated and What Actually Lowers It
Self-employment tax is 15.3% Social Security and Medicare on 92.35% of net self-employment earnings; in 2026 the 12.4% part stops at $184,500.
Selling a Rental Property: How the Gain Is Taxed and Ways to Defer It
A rental sale can trigger tax on depreciation (up to 25%), capital gains, the 3.8% NIIT, and state tax. A 1031 exchange or installment sale can defer some.
Selling Your Business: How Deal Structure Drives the Tax Bill
Deal structure sets the tax on a business sale: stock sales usually yield capital gain, asset sales can add ordinary income; QSBS may exclude some gain.
Selling Your Home: The Section 121 Exclusion Explained
Section 121 excludes up to $250,000 of home-sale gain ($500,000 for most married couples) if you owned and lived in it 2 of the last 5 years.
Sole Proprietor Taxes: Deductions, Retirement Plans, and Estimates
Sole proprietors pay income tax plus 15.3% self-employment tax on Schedule C profit. Deductions, retirement plans, and estimates shape the bill.
Tax Alpha: What Tax-Aware Investing Can and Can't Do
Tax alpha is the after-tax value from managing when and where investment taxes arise: loss harvesting, asset location, gain deferral, and Roth timing.
Tax Bracket Management: Smoothing Income Across Years
Bracket management means timing income, conversions, and deductions across years so less income lands in the top brackets. 2026 brackets run 10% to 37%.
Tax Considerations in Divorce: Filing Status, Property, Alimony, and Retirement Accounts
Property transfers between divorcing spouses are generally tax-free, but basis carries over. Post-2018 alimony isn't deductible or taxable.
Tax Planning Beyond April: Decisions to Make During the Year
Most tax-saving moves must happen by December 31. Planning during the year around income timing, gains, giving, and estimated tax keeps options open.
Tax Rules for Day Traders: Trader Status and the Section 475 Election
IRS trader status requires substantial, regular trading aimed at daily price moves. A Section 475 election makes gains ordinary and ends wash sales.
Tax Rules for U.S. Citizens Living Abroad: Filing, FEIE, Reporting, and Exit Tax
U.S. citizens and green card holders owe U.S. tax on worldwide income wherever they live. Exclusions, credits, and reporting rules shape what's due.
Tax-Efficient Asset Location: Which Account Should Hold Each Fund
Asset location puts each holding in the account type that taxes it most lightly (taxable, tax-deferred, or Roth) without changing your overall mix.
Tax-Exempt vs. Tax-Deferred: What's the Difference?
Tax-deferred money is taxed later, usually at withdrawal; tax-exempt income, like qualified Roth withdrawals, is not federally taxed at all.
Tax-Loss Harvesting: A Complete Guide
Tax-loss harvesting means selling investments below cost to realize losses that offset gains and up to $3,000 of ordinary income a year.
The One Big Beautiful Bill Act: What Changed for High Earners
The July 4, 2025 tax law made TCJA rates permanent, raised the SALT cap, expanded QSBS, set a $15M estate exemption, and tightened AMT from 2026.
Trust Tax Rates: Managing Compressed Brackets
Non-grantor trusts hit the 37% bracket above $16,000 of taxable income in 2026. Distributions, the 65-day election, and grantor status shift the tax.
Wash Sale Rule: The 61-Day Window and How It Works
A wash sale occurs when you sell at a loss and buy substantially identical securities within 30 days before or after. The loss is deferred, not deducted.
Year-End Tax Planning Checklist for 2026
Before December 31, 2026: review 401(k) deferrals, realized gains and losses, Roth conversions, charitable gifts under the new rules, RMDs, and estimates.