5 Quick Tax Tips for Retirees for 2025 and 2026, From a Financial Planner

These five key tax strategies can help retirees navigate new rules and deductions, reduce your taxes and preserve more of your retirement income. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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The U.S. tax code now exceeds 70,000 pages, with hundreds more added in 2025 alone. With so much complexity, it's easy for retirees to miss valuable opportunities to reduce their tax burden.Here are five key tax tips to consider if you're still working on your 2025 taxes and as you plan for your 2026 tax return.Recent tax law changes introduced a temporary deduction for people age 65 and older, designed to help offset the taxation of Social Security benefits — but it doesn't benefit everyone equally.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.Here's how it works:Because of the income limits, proactive tax planning is essential. Many retirees can benefit by managing their income — either reducing it to stay below the thresholds or increasing it strategically to fully utilize the deduction during its availability from 2025 through 2028.About Adviser IntelThe author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.Another notable change allows for the deduction of car loan interest — up to $10,000 per year — but with specific requirements.To qualify, the vehicle must be assembled in the United States. You can check the VIN on NHTSA's website, or you can verify the "final assembly point" on the window sticker.Income phaseouts begin at $100,000 (single) and $200,000 (married filing jointly).Keep in mind, this is a tax deduction — not a credit. For example, if you pay $2,500 in interest and are in the 22% tax bracket, your tax savings would be about $550.While helpful, this shouldn't drive your purchase decision — always prioritize your overall financial plan.Higher-income retirees may pay additional Medicare premiums known as IRMAA (income-related monthly adjustment amount). These surcharges are based on your modified adjusted gross income (MAGI) from two years prior.If your income has recently decreased due to retirement or another life-changing event, you may be able to lower your premiums.Steps to take:If approved, your Medicare premiums will be recalculated, and you may receive a refund for any excess IRMAA already paid.While not technically a tax, IRMAA functions similarly by increasing costs based on income — making tax planning just as important.With fewer taxpayers itemizing deductions today, many retirees have lost the ability to deduct charitable contributions.However, starting in 2026, a new provision allows for "above-the-line" charitable deductions:This creates a renewed incentive to track charitable donations. Be sure to keep receipts, as this will appear as a new line item on your 2026 tax return. The donation must be made in cash to a qualifying charity.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.For retirees age 70½ or older, qualified charitable distributions (QCDs) remain one of the most powerful tax-saving strategies.For example, if your RMD is $50,000, and you donate $25,000 through QCDs, you need to withdraw — and pay taxes on — only the remaining $25,000.It's important to note that QCDs are not clearly reflected on your Form 1099-R, so you must report them properly or inform your tax professional.Many custodians offer convenient ways to facilitate these donations, including direct check mailing or dedicated checkbooks for charitable giving.Tax planning in retirement requires more than just filing a return — it demands strategy. With new rules and opportunities emerging, staying informed and proactive can help reduce your tax burden, manage health care costs and preserve more of your retirement income.The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Investment advisory services are offered through McCarty Wealth, LLC, a registered investment adviser offering advisory services in the State of Florida and other jurisdictions where registered or exempted. Insurance services offered through McCarty Wealth Insurance Services, LLC. McCarty Wealth, LLC and McCarty Wealth Insurance Services, LLC are affiliated entities. This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Luke McCarty is a CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Retirement Planning Counselor (CRPC®) dedicated to helping individuals and families make sound financial decisions. With a passion for empowering clients to achieve their financial goals, Luke specializes in providing comprehensive financial planning services encompassing tax planning, employee benefits and retirement planning, estate planning, investment management and insurance strategies.