Hi,
Three changes landed in 2026, and they stack on top of each other in a way that quietly punishes exactly the people who receive equity.
- The AMT net widened. The income level where your AMT exemption starts disappearing dropped back to $500,000 for singles and $1,000,000 for joint filers, and it now vanishes twice as fast as before, 50 cents of exemption gone for every dollar over the line. It’s completely gone at $680,200 single and $1,280,400 joint. More high earners get pulled into AMT than in any year since 2017, and AMT throws out deductions you were counting on, like state and local taxes.
- Your itemized deductions got a haircut. If you’re in the top 37% bracket, every dollar of itemized deductions is now worth only 35 cents instead of 37. Small per dollar, real across a big return.
- The first slice of your giving no longer counts. There’s a new floor: charitable deductions only count above 0.5% of your income. On $1,000,000 of income, the first $5,000 you give is not deductible at all.
Put them together and the picture flips. You write a large check to charity expecting a large deduction. Instead the first chunk is disallowed by the floor, the rest is worth only 35 cents on the dollar, and if the gift year is also an AMT year, other deductions you planned around simply disappear. The “obvious” move quietly costs you.
None of this is fixable in April. It’s fixable now, and only now. The wins here come from timing across years, not reacting after the fact: bunching two years of giving into one to clear the floor and maximize the deduction, timing income and capital gains to keep your AMT exemption intact, and coordinating charitable gifts (appreciated stock, a donor-advised fund) with your investment moves. Every one of those has to happen before year-end, and you still have half of 2026 to execute.
Here’s the part that trips people up: the tax side and the investment side of your life usually sit with two different professionals who never talk to each other. So no one is looking at the whole picture, and the AMT trap lives exactly in that gap, where a capital gain, a Roth conversion, and a charitable gift all collide. That’s why we bring it together under one roof, your financial planning team and your tax team working as one. Here’s exactly what we do:
- A written financial plan with your goals, cash flow, and net worth mapped out and kept current as life changes.
- Year-round proactive tax planning, including AMT and deduction-timing analysis and Roth conversion analysis, to cut what you owe instead of scrambling once a year.
- An annual review with both teams in the room, so every piece stays aligned as the markets and the tax laws shift.
- Personal and business tax returns prepared straight from the financial and tax plan, by the same team.
Reply to this email by Monday next week and we’ll set up a free 15-minute session with both our financial and tax teams. Bring your most recent tax return and a recent investment statement or two, so we can tell you exactly where you stand and what to fix first, not generalities.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com