How to Prepare for the 2026 Tax Season: Key Dates, New Proposals & Tax Strategies You Can’t Miss

If you’ve ever felt like the tax code is always changing just when you’ve finally figured it out—you’re not alone. As someone who’s been in the trenches with clients for over two decades, I can tell you that the biggest tax wins usually don’t come in April. They happen months—sometimes years—before a return is even filed.

Right now, most people are easing into the second half of 2025, thinking taxes are a “next year” problem. But here’s the truth: some of the most significant tax policy shifts are quietly unfolding behind headlines about tariffs, vouchers, capital gains, and rising homeownership costs. These developments may not feel urgent—until they hit your portfolio, your paycheck, or your refund.

In this blog, I’m going to walk you through everything you should be paying attention to—from volatile tariff deadlines that could jolt the stock market to new bills that may allow the wealthy to skip capital gains taxes under the guise of education reform. We’ll also break down updates to the capital gains brackets for 2025, how expats can still file smart, and what homeowners need to know about the SALT cap squeeze.

This isn’t just another tax blog. It’s a proactive blueprint designed to help you prepare today, so you’re not scrambling tomorrow.

Let’s start with what’s quietly lurking in the background but could easily trigger the next market slide: tariffs.

The Market Doesn’t Sleep on Tariffs—Neither Should You

You might not see it on the front page every day, but tariffs are back in the news—and they’re no small deal when it comes to taxes and investments.

Remember “Liberation Day”? It was a sudden tariff announcement that led to an immediate market tumble—until a 90-day pause cooled the waters. But those pauses are now set to expire in the coming weeks, and a string of key dates could bring everything back to the surface, fast.

Here are a few deadlines you need to keep on your radar:

July 9, 2025 – The current 90-day suspension on U.S. tariffs (excluding China) ends. That means tariffs on key imports could resume overnight.
July 14, 2025 – This marks the end of the EU’s own tariff suspension. If negotiations stall, we could see a tit-for-tat escalation.
July 29, 2025 – The G20 Summit. These global meetings have brought about trade truces in the past, but there’s no guarantee it’ll happen again.
July 31, 2025 – A federal court is expected to decide whether presidential tariffs violated the International Emergency Economic Powers Act (IEEPA). If ruled unconstitutional, this could shake up how future tariffs are handled.
August 10, 2025 – A separate truce between the U.S. and China over AI chips and rare earth materials expires. That’s another wildcard with serious economic weight.

So why should you care if you’re not in the business of importing widgets?

Because tariffs act just like taxes—either your favorite brand absorbs the cost and sees their profit margin shrink, or they pass it to you at checkout. Either way, the ripple effect moves through the economy fast. And when markets are surprised—especially by something as significant as a jump from 2% to 20% tariffs on goods—it’s investors like you who feel the heat first in your 401(k), brokerage accounts, and mutual funds.

To put it into perspective, had one proposed tariff hike gone through, it would have raised $620 billion in annual revenue—more than the total U.S. corporate tax collected in the same period.

That’s not a small policy tweak. That’s a tectonic shift in how wealth moves and grows.

As your CPA, I’m not just watching these developments for curiosity’s sake. If you have capital gains exposure, are planning to sell appreciated assets, or are just trying to ride out the market with your retirement intact, these tariff moves could affect everything from when you sell to how you harvest your losses.

Pro tip from my desk: If you’re holding investments in sectors like electronics, manufacturing, agriculture, or even high-end retail, this is the time to run your tax simulations before any of these tariff deadlines pass. Markets don’t always give you time to react after the fact.

The “Big Beautiful Bill” and the Capital Gains Loophole Hiding in Plain Sight

If you’ve been following tax policy chatter coming out of Washington lately, you might have heard about a sweeping GOP-backed proposal called the “One Big Beautiful Bill Act,” or OBBBA. On the surface, it’s being marketed as a boost for school choice—encouraging donations to private school scholarship organizations. But when you peel back the layers, there’s a provision buried inside that could rewrite how high-net-worth donors handle capital gains taxes. And it’s causing a stir for good reason.

Here’s how it works. Under the OBBBA proposal, individuals and corporations would receive a dollar-for-dollar federal tax credit for donations made to Scholarship Granting Organizations (SGOs), which in turn fund private school and homeschooling scholarships. The annual cap for these credits would be $5 billion.

So far, it sounds like a generous incentive to support education. But there’s a twist.

Let’s say someone donates appreciated stock—shares that have grown in value over time. Normally, when you sell those shares, you owe capital gains tax on the profits. But under this proposal, if you donate that stock to an SGO instead of selling it, not only do you avoid paying capital gains tax, but you also receive a full federal tax credit equal to the asset’s fair market value.

It’s not a deduction. It’s a credit. And that’s what makes it so powerful.

By some estimates, this provision alone could result in more than $2 billion in capital gains taxes being avoided over the next decade. Critics argue that it turns charitable giving into a tax shelter for the wealthy—allowing them to skip capital gains taxes entirely while shifting federal funds away from public education and general nonprofit work.

To give you a sense of the broader impact, if passed as-is, the total cost of this bill could exceed $23.6 billion in just ten years. That includes $21.5 billion in tax credits and another $2.1 billion in forgone capital gains tax revenue.

And the implications don’t stop at the federal level. States with high-income earners and large donor bases—like California, New York, and Massachusetts—stand to lose millions in capital gains revenue. California alone could take a $176 million hit.

The provision has already run into procedural trouble. On June 28, 2025, the Senate Parliamentarian struck it down for violating the Byrd Rule, which limits what can be included in reconciliation bills. But even that hasn’t stopped supporters from looking for a way to reintroduce it in a revised format.

So what does this mean for you?

If you’re a donor, investor, or someone who makes sizable charitable contributions as part of your estate or tax plan, this is a provision worth watching very closely. It represents a dramatic shift in how the tax code treats philanthropic giving—one that could create a two-tiered system where some charities become tax goldmines while others lose ground.

From where I sit, this raises important planning questions. Should you consider making stock-based donations this year before the rules potentially change? If the bill passes in some form, how should you sequence your giving to make the most of it—ethically and legally?

Here’s my take: tax policy is moving in ways that favor targeted, intentional giving. Gone are the days when a blanket donation strategy worked across the board. If you’re planning to give back—and want to keep your capital gains exposure in check while doing it—this is the year to plan ahead, not look back.

Next up, we’ll shift gears and talk about capital gains rates themselves. Because whether you’re donating appreciated assets or selling them outright, what you owe depends heavily on the tax bracket you fall into—and those numbers just shifted for 2025. Let’s break them down in plain language.

Capital Gains Tax Rates for 2025 — What’s New, What’s Not, and How to Plan Ahead for 2026

Whether you’re selling stocks, investment properties, or even a few vintage collectibles that gained value over time, understanding how capital gains are taxed is one of the smartest financial moves you can make heading into 2026. These aren’t just numbers for your accountant to plug into a return. They directly affect what lands in your pocket after a big sale.

Let’s start with the basics. The capital gains tax rate you pay depends on two things:

How long you’ve held the asset
Your taxable income in the year you sell

If you’ve held an asset for more than one year, it qualifies as a long-term capital gain—which is taxed at more favorable rates than short-term gains, which are taxed as regular income. In 2025, those long-term rates—0%, 15%, and 20%—are still in place, but the income thresholds that define who pays what have been adjusted for inflation. These adjustments may look small, but they can make a big difference in your tax liability.

Here’s a quick snapshot of where things stand for 2025:

For single filers:
- 0% rate applies to income up to $48,350
- 15% applies up to $533,400
- 20% kicks in above that
For married couples filing jointly:
- 0% rate applies up to $96,700
- 15% applies up to $600,050
- 20% begins above that
For head of household filers:
- 0% rate goes up to $64,750
- 20% applies after $566,700

These changes are intended to counteract inflation and avoid “bracket creep”—a situation where you pay more tax just because the dollar is worth less, not because you’re actually wealthier.

But there’s more to the story, especially for high earners.

If your income exceeds $200,000 (single) or $250,000 (married filing jointly), you may also be subject to the 3.8% Net Investment Income Tax, commonly referred to as NIIT or the Medicare surtax. This applies not just to capital gains, but also to dividends, interest, rental income, and other investment returns.

Add that 3.8% on top of your long-term capital gains rate, and your real rate could climb as high as 23.8%.

There are also special categories that carry their own rules. For instance:

Collectibles like fine art, precious metals, and antiques are taxed at a maximum long-term rate of 28%
Gains from real estate sales may trigger a 25% tax on any unrecaptured depreciation
Qualified Small Business Stock (QSBS), if held for at least 5 years, can allow for partial or full exclusion of gains, but what’s left is often taxed up to 28%

And let’s not forget about cryptocurrency. The IRS still treats it as property, not currency. That means crypto trades or sales are taxed under the same capital gains rules, with the same short-term vs. long-term distinction.

Planning around these rules is not just about avoiding taxes—it’s about protecting your overall financial strategy.

Here are a few techniques I often use with clients:

Holding appreciated assets for over one year to secure long-term rates
Harvesting tax losses to offset gains, especially toward year-end
Leveraging tax-deferred accounts like IRAs or 401(k)s for investment growth
Timing the sale of assets to avoid crossing into a higher bracket or triggering NIIT
Strategizing around charitable donations—especially if using appreciated assets

What I always remind clients is this: it’s not just what you earn, it’s what you keep. And in a climate where proposals like the OBBBA could reshape how charitable donations interact with capital gains, your strategy needs to be flexible and informed.

Looking ahead to 2026, these 2025 figures can serve as your planning benchmark. If you’re considering selling a business, downsizing your home, or rebalancing your investment portfolio next year, running early calculations based on these thresholds could help you time your transactions with confidence.

Next, we’ll shift our focus to something that’s been quietly squeezing homeowners year after year—hidden costs and the SALT cap. If you live in a high-tax state, this is a section you won’t want to skip.

Hidden Home Costs and the SALT Cap Squeeze — What Homeowners Should Watch Heading Into 2026

For many Americans, homeownership still feels like the ultimate sign of stability and success. But over the past few years, I’ve had more and more clients walk into my office asking the same question—“Why do I feel like I’m getting poorer even though I own my home?”

The answer often comes down to two things: rising hidden costs and a stubborn federal tax rule known as the SALT cap. And both are poised to play an even bigger role in 2026 unless Congress takes action.

Let’s talk numbers first.

According to Bankrate’s 2025 study, the average homeowner now pays over $21,000 per year in hidden costs. That includes:

$8,800+ in maintenance and repairs
Nearly $4,500 in utilities
$4,316 in property taxes
$2,300 in insurance
Around $1,500 for internet and cable

And in some states, these hidden costs cross $34,000 a year—putting intense pressure on budgets that were already stretched thin by inflation and interest rate hikes. But what hurts even more is the realization that you may not be able to deduct all those hefty state and local property taxes on your federal return.

That’s because of the SALT cap.

The State and Local Tax deduction cap, introduced under the 2017 Tax Cuts and Jobs Act, limits the amount of state income and property taxes you can deduct to $10,000 per year. That might be manageable for some, but for homeowners in high-tax states like New Jersey, New York, California, Connecticut, and Massachusetts, that cap is more than just a line in the tax code—it’s a financial wall.

Take Washington, D.C., for instance. The average resident pays nearly $15,000 in state and local taxes—almost 50% above what the SALT cap allows you to deduct. That means you’re paying high taxes locally, but can’t fully offset them federally.

So what’s on the table for 2026?

The GOP’s new tax proposal—the same one with the school donation credit—offers two competing paths:

The House version of the bill raises the SALT cap to $40,000 for most taxpayers, with the benefit phasing out above $500,000 of income (for married joint filers).
The Senate version sticks with the existing $10,000 cap, treating it as a placeholder for later negotiation.

If nothing changes, and the SALT cap isn’t increased or repealed, more Americans will find themselves paying higher federal taxes even as they pay higher local ones. And with property tax rates climbing—reportedly the biggest jump in five years—this isn’t something that’s going away.

As a CPA, I see this as both a challenge and an opportunity.

Here’s what I’m recommending to homeowners heading into 2026:

Don’t assume the SALT cap will be lifted. Plan as if the $10,000 limit is staying unless Congress proves otherwise.
Track every deductible home-related expense now. You may qualify for other tax-saving strategies (energy credits, business-use deductions, etc.).
If you’re thinking about selling, especially in a high-tax zip code, let’s time it around the new capital gains thresholds we just discussed.
Consider mid-year planning to adjust withholdings or estimated tax payments if you expect to lose out on state/local deductions.
Explore whether itemizing or taking the standard deduction makes more sense in your situation, particularly if you also donate.

The bottom line is owning a home is still one of the most powerful ways to build long-term wealth—but the tax rules around it are tightening. If you’re not planning around the SALT cap and rising costs now, you could find yourself with a smaller refund—or a surprise tax bill—come 2026.

U.S. Expats — What You Need to Know Before the 2026 Filing Season Closes In

Living abroad may come with perks like international travel and a new cultural experience, but it doesn’t give you a break from the IRS. That’s something many U.S. citizens overseas don’t realize—until they get a penalty notice or miss a critical deadline.

If you’re a U.S. expat or you have clients, employees, or family members living abroad, 2026 will be an especially important year to get everything aligned. There are a few key rules, credits, and planning strategies that can significantly reduce what you owe—or get you in trouble if you overlook them.

Let’s start with the most common misconception I hear:
“I live outside the U.S., so I don’t have to file a U.S. tax return.”

That’s false. U.S. citizens and green card holders must file a federal tax return each year—no matter where they live, and no matter where their income comes from. Even if you’ve already paid taxes in your country of residence, you still need to report that income to the IRS.

Now, the good news is that the U.S. tax system does offer some relief. But only if you take the right steps.

Here are the key tax tools U.S. expats can use in 2025 to prepare for the 2026 season:

Foreign Earned Income Exclusion (FEIE)

In 2025, you can exclude up to $130,000 of foreign earned income (up from $126,500 in 2024).
You qualify either by being a bona fide resident of a foreign country or by spending at least 330 full days abroad in a 12-month period.
You must file IRS Form 2555 to claim this exclusion.

Foreign Housing Exclusion or Deduction

Expats living in high-cost cities abroad may also qualify to exclude up to $39,000 in housing expenses in 2025.
If you’re self-employed, you may instead qualify for the Foreign Housing Deduction.

Foreign Tax Credit (FTC)

This provides a dollar-for-dollar credit for foreign income taxes paid, which helps offset U.S. tax liability.
Use IRS Form 1116 (or Form 1118 for corporations) to claim the credit.
Unlike the FEIE, the FTC applies to both earned and passive income (like dividends or interest), and you can carry forward any unused credit to future years.

Child Tax Credit (CTC)

In 2025, qualifying expats may claim up to $2,000 per child—with $1,700 potentially refundable.
But there’s a catch: if you use the FEIE, you can’t also claim the refundable portion of the CTC.
However, if you opt to use the FTC instead, you may still be eligible.

Automatic Filing Extensions

U.S. expats get an automatic two-month extension to June 16, 2025.
If you need more time, you can request an extension to October 15 using IRS Form 4868.
But keep in mind: an extension to file is not an extension to pay. Interest on any unpaid taxes still starts accruing from April 15.

What’s on the horizon?

Some lawmakers, including former President Trump, had previously proposed ending double taxation for expats entirely, but as of now, those policy changes remain stalled. Still, there is talk of raising the Child Tax Credit to $2,500 per child through 2028, and that could reshape expat planning in coming years—especially for families with young children living abroad.

From my perspective, the biggest issue facing expats isn’t tax complexity—it’s missed opportunity. Many leave thousands in deductions and credits unclaimed, or they fail to file altogether because they assume no U.S. taxes are owed. But the IRS doesn’t see it that way.

Here’s what I recommend if you’re living abroad heading into 2026:

Keep detailed records of income earned overseas and foreign taxes paid.
Track your days in-country if you’re using the Physical Presence Test.
Choose your strategy early: FEIE vs. FTC. You usually can’t claim both for the same income.
Don’t wait until June or October to reach out—some tax planning decisions must be made before year-end to be effective.

And above all, get professional guidance. International tax rules are layered, and penalties for missing forms like the FBAR or FATCA disclosures can be steep—even when no tax is owed.

Next, we’ll wrap it all up with a practical, action-oriented checklist to help you build a personalized 2026 tax game plan that takes all of these moving parts into account.

Your 2026 Tax Prep Checklist — Action Steps to Take Now, Not Later

If you’ve made it this far, you already know—2026 won’t be a year to leave your tax planning on autopilot. Between shifting capital gains brackets, volatile tariff timelines, donation-related tax credit proposals, and the SALT cap squeeze, the most valuable thing you can do is prepare before the season actually arrives.

Here’s a practical checklist I use with clients to get ahead of the curve:

Reassess Your Investment Strategy Before the Tariff Deadlines Hit
Markets are hypersensitive to tariff announcements—especially when they come unexpectedly. If you hold equities in sectors like manufacturing, automotive, AI tech, or consumer goods, let’s run a scenario to understand how a tariff hike could impact your portfolio’s tax exposure. Selling too soon—or too late—could be a costly misstep.
Evaluate Your Capital Gains Plan Based on 2025 Thresholds
Run an estimate of your 2025 taxable income now to know which capital gains bracket you’ll fall into. This will help you decide whether to sell appreciated assets this year or defer into 2026. If you’re nearing a bracket boundary, minor timing shifts can save thousands.
Consider the OBBBA Impact If You’re Making Charitable Contributions
If you regularly donate to schools, religious institutions, or nonprofits, it’s worth understanding how your deductions might shift—especially if dollar-for-dollar credits are passed for one type of donation and not others. We can review which assets to give and when, so your generosity doesn’t create an unintentional tax burden.
Track Hidden Homeownership Costs and Prepare for SALT Cap Realities
Start documenting major property-related expenses like repairs, local taxes, or renovations. If you live in a high-tax state, assume the SALT cap stays in place unless there’s a confirmed legislative change. We can explore whether standard deductions or itemizing will deliver the bigger benefit.
If You’re Living Abroad, Choose Your Exclusion or Credit Path Early
Whether you’re planning to use the FEIE or the FTC, map it out by December so we can identify what supporting documents you’ll need and avoid conflict between overlapping credits. If you’re nearing the 330-day residency test, your calendar matters more than you think.
Don’t Wait Until April—Start Mid-Year Planning Now
By October, most of the tax-saving opportunities are already behind you. Adjust your withholdings or estimated tax payments before year-end. If you’re facing capital gains, bonus income, or property sales, we’ll need time to pivot and apply the right strategies.

This isn’t a one-size-fits-all checklist—it’s a foundation. Your income, investment goals, location, and family situation all shape how these moving parts affect you.

And that brings us to the final step.

Final Thoughts: Let’s Build Your 2026 Tax Game Plan Today

You don’t need to become a tax expert to take control of your financial future—you just need to work with someone who stays a step ahead of what’s changing.

Whether you’re selling assets, investing through market uncertainty, buying a home, or just trying to file a clean return as an expat—2026 is shaping up to be a year where smart, early decisions will separate those who save from those who scramble.

That’s where I come in.

If you want to build a personalized tax strategy around your goals, your lifestyle, and your money—now is the time to act. Visit johngeantasiocpa.com to schedule a consultation, or reach out with questions. Let’s turn tax season into a planning advantage—not a paperwork headache.

Also Read –

How to Prepare for the 2026 Tax Season: In-Depth Guide for Individuals and Small Businesses

John E Geantasio CPA LLC1