Tax law changes are nothing new. But when several updates take effect at once, they can change how much you owe, what you can deduct, and which planning strategies make sense.

As we head into 2026, there are a few changes worth paying attention to. Not because they require alarm, but because they create new planning considerations. At Granite, our work always starts with understanding what actually happened on your most recent return, then using that information to make thoughtful decisions ahead.

Here are the key changes we are watching and how we help clients think through them.

1. The SALT deduction has more room, at least for now

Recent legislation increased the State and Local Tax (SALT) deduction cap:

• From $10,000 to $40,000 in 2025
• With a 1% annual increase through 2030

For higher earners, especially those paying significant state income or property taxes, this change may reopen the door to itemizing deductions, even as standard deductions remain higher than in the past.

What this means for you:

• Review whether you itemized or took the standard deduction on your most recent return.
• If you paid substantial state or local taxes, it may be worth re-evaluating that choice.
• Future decisions around charitable giving and property taxes may benefit from more intentional timing. (See #3 for more about charitable giving.)

This is not about assuming itemizing is “better” again. It is about checking whether the math has changed for your situation.

2. Mortgage interest rules remain in place and matter more in today’s rate environment

Under current law, homeowners may deduct mortgage interest on loan balances of up to $750,000 for married couples filing jointly, or $375,000 for married filing separately.

In a higher interest rate environment, mortgage interest deductions can have a more noticeable impact, particularly for households already close to itemizing thresholds.

What this means for you:

• If you own a home, review how much interest you actually paid last year.
• If you are considering buying or refinancing, understand how interest costs affect deductions and cash flow.
• No matter what, make sure you “zoom out” and look at your full financial picture when making housing decisions. Buying or refinancing a home should support your broader financial goals, not compete with them.

3. Charitable giving rules have tightened

One of the less visible changes affects how charitable contributions are deducted:

• The first 0.5% of adjusted gross income given to charity is no longer deductible.
• The maximum percentage of income eligible for charitable deductions has been reduced.

For some taxpayers, this reduces the tax benefit associated with charitable giving.

What this means for you:

• If you give regularly, review how much of that giving was actually deductible on your last return.
• Consider whether adjusting when you give, combining contributions into certain years, or using tools like donor-advised funds or qualified charitable distributions could improve the tax outcome, especially if you are retired or approaching eligibility for QCDs.

Our goal is not to discourage giving. Charitable donations that align with your values can be a really important part of a financial plan. But we are helping clients make sure generosity is structured in a way that aligns with current rules.

4. Why your most recent tax return still matters

At Granite, tax returns are not something we glance at and move past.

When we review a client’s return, we work through a detailed checklist designed to understand what actually happened and where opportunities may exist. This is not about finding errors or second-guessing a CPA. It is about gaining context.

We are asking questions such as:

• Where did income come from, and where did it land?
• Were retirement distributions, Roth conversions, or QCDs reported as intended?
• How were capital gains, losses, and carryforwards used?
• Did withholding and estimated payments match the client’s preferences?
• What changed from the prior year, and should it have?

What this means for you:

Your most recent tax return shows how your income, deductions, and strategies actually played out. Reviewing it carefully can help identify what worked as expected, what led to surprises, and where small adjustments could improve things going forward.

5. The bigger picture: tax planning is a cycle, not a one-time task

A common reaction to tax law changes is the desire for a single solution that “fixes” things permanently.

In reality, effective tax planning is ongoing. Laws change. Income changes. Family situations change. Strategies that worked well a few years ago may need to be adjusted.

What this means for you:

• Tax planning works best when it is revisited regularly
• Coordination between your advisor and CPA matters
• Small adjustments, made intentionally, often have the biggest impact over time

Our perspective heading into 2026

You do not need to become a tax expert. And you do not need to overhaul your financial life because a rule changed. (That’s what we’re here for!)

What does matter is understanding how recent changes showed up on your last return, recognizing where the rules are shifting, and using that information to continue making good decisions ahead.

Would you like help reviewing how these changes apply to your situation, or want to talk through planning opportunities before the year moves too far along? Just reach out – we are here and happy to help.