It is January, and we now have new tax laws to absorb.  What planning might be needed for your individual situation?  If you haven’t already, we strongly suggest checking in with your tax professional.  Listed below are some of the changes our research tells us could be the most common and impactful to consumers.  

  1. SALT Deduction Increases to $40,000 (with income limits) 

This one became effective in 2025. The state and local tax deduction cap jumps from $10,000 to $40,000 for those with adjusted gross income up to $500,000 (Source: Bipartisan Policy Center ). 

Benefits: For homeowners in high-tax states (yes, Illinoisans, this is us!) who itemize, this provides significant tax relief by allowing you to deduct up to $40,000 in state and local taxes. 

Restrictions: This benefit phases down for taxpayers with AGI above $500,000 and reverts to the old $10,000 cap if your AGI exceeds $600,000. Additionally, this change is only effective through 2029 unless Congress makes it permanent, and you must itemize deductions (rather than taking the standard deduction) to benefit.  

2. Senior Bonus Standard Deduction: An Extra $6,000 

(Also applicable for 2025 returns, due April 15, 2026) 

Anyone 65 or older gets an additional $6,000 standard deduction ($12,000 for married couples who both qualify) for tax years 2025-2028 (Source: IRS). 

Benefits: This provides meaningful tax savings for most retirees by reducing taxable income by an additional $6,000-$12,000. 

Restrictions: This deduction phases out for higher-income earners (specific phase-out thresholds apply based on filing status), and the benefit is temporary, currently set to expire after the 2028 tax year.   

3. HSA Eligibility Expands Dramatically 

ACA bronze plans and other catastrophic health plans become HSA-compatible starting January 1, 2026 (Source: IRS ). People with direct primary care arrangements can also now contribute to HSAs if their monthly fees are $150 or less ($300 for families) (Source: Risk Strategies). 

Benefits: This opens HSA tax advantages—including tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses—to millions more people who previously couldn’t access these accounts. 

Restrictions: You must still be enrolled in an HSA-qualified high-deductible health plan (HDHP) to contribute. Bronze and catastrophic plans must meet specific deductible minimums, and you cannot be enrolled in Medicare or be claimed as a dependent on someone else’s tax return. For direct primary care, only arrangements with monthly fees at or below the specified limits qualify. 

  4. Charitable Giving Planning: Advantages and Restrictions 

For Non-Itemizers: 

Advantage: You can now deduct up to $1,000 in charitable contributions ($2,000 for couples) even if you take the standard deduction (Source: Journal of Accountancy). This is a new benefit for taxpayers who don’t itemize. 

Restrictions: Only cash gifts qualify (not appreciated stock, real estate, or other property) 

Gifts must go directly to public charities (NOT to donor-advised funds or private foundations) 

The deduction is capped at $1,000 individual/$2,000 married filing jointly regardless of how much you donate. 

For Itemizers: 

Advantage: You can still deduct charitable contributions as you have in the past, and there’s no maximum dollar cap on total giving (subject to the usual AGI percentage limitations). 

Restriction: You can now only deduct charitable contributions that exceed 0.5% of your AGI (Source: Kiplinger). 

Example: If your AGI is $100,000: 

0.5% of $100,000 = $500 

If you donate $700, you can only deduct $200 ($700 – $500) 

If you donate $400, you get no deduction (below the threshold) 

This new “floor” effectively eliminates or reduces deductions for smaller charitable gifts. 

Bottom line: Understand the new 0.5% AGI floor if you itemize, which may eliminate deductions for smaller gifts, or evaluate the new $1,000/$2,000 deduction if you don’t itemize (keeping in mind the cash-only and public charity restrictions). 

Planning Opportunities   

• SALT deduction strategy: If you itemize, you can now deduct up to $40K in state/local taxes (vs. the old $10K cap)  

• Senior bonus deduction: Seniors 65+ should now adjust withholding to capture that extra $6K deduction for the rest of 2026  

• Charitable giving planning: Understand the new 0.5% AGI floor if you itemize, or the new $1K/$2K deduction if you don’t   

Review Your 2026 Coverage  

• HSA opportunities: If you enrolled in a ACA bronze or catastrophic health plan, you could now contribute to an HSA  

• Direct primary care: You can now use HSA funds for DPC* fees ($150/month individual, $300 family) 

  * People with direct primary care arrangements—a membership model where you pay your doctor a flat monthly fee for unlimited primary care visits—can also now contribute to HSAs if their monthly fees are $150 or less ($300 for families).  

---

Mosaic FI, LLC is a State of Illinois-registered investment adviser. The opinions expressed herein are those of the firm and are subject to change without notice due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of Jenifer Aronson and Leslie Meisner, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes, January 13, 2026. 

Mosaic FI, LLC has provided links to various other websites. While Mosaic FI, LLC believes this information to be current and valuable to its clients, Mosaic FI, LLC provides these links on a strictly informational basis only and cannot be held liable for the accuracy, time-sensitive nature, or viability of any information shown on these sites. 

All investments and strategies have the potential for profit or loss. Different types of investment involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. 
 
This material is not intended to provide investment, legal or tax advice as these materials are for general educational purposes only. Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results.