Tax law changes create opportunities, but only for those who plan ahead. Whether you’re saving for education, supporting charitable causes, building family wealth or managing investment gains, several provisions may provide valuable planning opportunities.
One year after the enactment of the One Big Beautiful Bill Act (OBBBA), now is a great time to revisit your strategy.
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529 Plans: More Flexible Than Ever
529 plans have become far more versatile than traditional college savings accounts. Recent changes under the One Big Beautiful Bill Act (OBBBA) expanded both the types of education expenses that qualify and the ways families can use these funds throughout a child’s educational journey.
Beginning in 2026, the annual tax-free withdrawal limit for K-12 education expenses increased from $10,000 to $20,000 per student. In addition, the definition of qualified expenses expanded beyond tuition to include books, curriculum materials, tutoring, standardized testing fees, online educational programs and certain specialized educational services.
The flexibility doesn’t stop there. Qualified higher education expenses now include recognized postsecondary credential programs, creating opportunities for students pursuing trade schools, certifications and other workforce-focused educational paths.
The OBBBA also permanently extended the provision allowing tax-free rollovers from 529 plans to eligible ABLE accounts, providing additional flexibility when educational needs or family circumstances change over time.
Planning Strategies to Consider
- Reassess your current education funding strategy. Expanded withdrawal limits and qualified expenses may allow you to use 529 funds in ways that were not previously available.
- Evaluate whether additional contributions make sense. Families with younger children may benefit from increasing savings sooner to maximize long-term tax-free growth.
- Consider nontraditional education paths. Trade schools, credentialing programs and professional certifications may now qualify for tax-free distributions.
- Coordinate 529 withdrawals with education tax credits. The same expenses generally cannot be used to claim both a tax credit and tax-free 529 treatment.
- Review opportunities involving ABLE account rollovers if they align with your family’s circumstances.
- Maintain strong documentation, including receipts, invoices and records supporting how distributions were used.
Bottom line: 529 plans are no longer just a college savings account. They have become a flexible education-planning tool that can support a broader range of educational goals while continuing to provide valuable tax advantages.
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Trump Accounts: A New Planning Tool for Families
The One Big Beautiful Bill Act (OBBBA) introduced the Trump Account, a new tax-advantaged savings vehicle intended to help families build long-term wealth for children. While the rules are still new, these accounts add another planning option to the mix of 529 plans, Roth IRAs, and custodial accounts.
Eligible children may receive contributions from parents, grandparents, relatives and others, with annual contributions generally limited to $5,000 per year and investment earnings growing tax-deferred. Some children may also qualify for government-funded seed contributions, while certain charitable organizations and employers may have opportunities to contribute.
Planning Strategies to Consider
- Start early to maximize the benefits of long-term tax-deferred growth.
- Compare Trump Accounts to 529 plans, Roth IRAs and other savings vehicles to determine which option best aligns with your family’s goals.
- Evaluate potential government, charitable and employer contribution opportunities.
- Consider how the account fits into broader education, wealth transfer and long-term financial planning objectives.
- Monitor future guidance and implementation updates as additional rules and opportunities continue to emerge.
Bottom line: Trump Accounts may provide families with a new way to build long-term wealth for children while complementing existing education and savings strategies. Early planning can help determine whether they deserve a place in your overall financial plan.
For more information: Eligibility requirements, contribution rules, government-funded accounts, employer contribution opportunities and long-term distribution considerations make Trump Accounts more complex than they may first appear. Check out our companion article, “Trump Accounts: A New Savings Opportunity for Children,” for a deeper look at how these accounts work and how they compare to other family savings strategies.
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Opportunity Zone Investments: Timing Is Critical
Qualified Opportunity Funds (QOFs) continue to offer unique tax planning opportunities for individuals with significant capital gains. While some of the original Opportunity Zone benefits have changed over time, taxpayers may still have an opportunity to defer taxes on eligible gains and, in certain situations, eliminate tax on future appreciation of the investment.
For many investors, the value of an Opportunity Zone investment comes down to timing. The tax benefits available can vary depending on when the investment is made, how long it is held and the source of the underlying capital gain. As a result, proactive planning is essential before completing a major transaction.
Planning Strategies to Consider
- Review upcoming capital gain events early. Sales of business interests, real estate and investment securities may create Opportunity Zone planning opportunities.
- Understand the investment timeline. Many gains must be reinvested within a 180-day window to qualify for Opportunity Zone treatment.
- Evaluate the long-term benefits. Investors who hold a Qualified Opportunity Fund investment for at least 10 years may be able to exclude future appreciation from taxable income.
- Coordinate gain and loss planning. Capital losses may reduce the amount of gain eligible for deferral and should be considered as part of your overall tax strategy.
- Assess liquidity needs before investing. Understanding future cash flow requirements can help avoid unexpected challenges when gains become taxable or when capital is committed for the long term.
Bottom line: Qualified Opportunity Funds can still provide meaningful tax benefits, particularly for investors with significant capital gains and a long-term investment horizon. However, strict timing requirements and investment rules make early planning essential.
For more information: Opportunity Zone planning involves much more than simply reinvesting a gain. Investment deadlines, holding periods, gain eligibility rules and long-term appreciation benefits can all influence the outcome. Read our companion article, “Qualified Opportunity Zone Funds: Tax Planning Considerations for Capital Gain Deferral and Exclusion,” for additional planning insights.
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Charitable Contributions: Be Strategic with Your Giving
Charitable giving remains one of the most flexible tax planning tools available when paired with an intentional strategy. Updated deduction limitations tied to adjusted gross income may affect how much tax benefit you receive from charitable gifts.
What’s Changed
Updated deduction rules, including new limitations tied to adjusted gross income, may impact how much benefit you receive from charitable gifts. Starting with tax year 2026, itemizers can only deduct charitable contributions to the extent they exceed 0.5% of adjusted gross income (AGI). In addition, taxpayers in the highest tax bracket face an additional limitation on the value of itemized deductions, which includes charitable deductions. This effectively reduces the tax benefit of deductions for some high-income taxpayers.
Among the more impactful changes is the ability to deduct contributions by taxpayers who do not itemize. Individuals can now deduct up to $1,000 (single) or $2,000 (married filing joint) for cash charitable contributions in addition to their standard deduction.
Planning Strategies to Consider
- Time your contributions: Making contributions in a specific year can help maximize your deduction depending on your total itemized deductions.
- Consider “bunching” your donations: Instead of giving annually, consider consolidating multiple years of giving into one year to exceed the standard deduction threshold and itemize.
- Use donor-advised funds: These allow you to take a deduction now while distributing funds to charities over time, helping you manage both tax benefits and giving goals.
- Donate appreciated assets: Donating appreciated stock can help you:
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- Avoid capital gains taxes
- Receive a deduction for fair market value
Bottom line: With the right strategy, charitable giving can deliver both meaningful impact and meaningful tax savings.
Final Takeaway: Planning Now Creates Opportunity Later
The biggest tax-saving opportunities often come from planning before decisions are made, not after. Across education planning, charitable giving, family savings and Opportunity Zone investments, success depends on timing, coordination and strategy.
Let’s Talk Strategy
If you’d like to explore how these opportunities may apply to your family, finances or long-term goals, connect with your advisor. Proactive planning today may create meaningful benefits tomorrow.