The Q2 Doc Wealth Newsletter

The State and Local Tax (SALT) deduction cap jumped from $10,000 to $40,000 for joint filers (less for single filers) for tax years 2025 through 2029. More physician households will itemize as a result.

If your modified AGI exceeds roughly $500,000 ($250,000 if married filing separately), the higher cap phases down by 30 cents per dollar above that threshold, with a $10,000 floor.

High earning households may benefit from income management approaches to stay under the phaseout.

Trump Accounts (the new tax advantaged savings account for children) become available for contributions starting July 4, 2026. Parents and others can contribute up to $5,000 per year per child after tax. Funds grow tax-free until age 18, then convert to a retirement IRA in the child’s name.

For children born 2025 through 2028, the federal government adds a one time $1,000 contribution.

If you have eligible kids and want to fund accounts at launch, we should talk about how Trump Accounts fit alongside 529 plans, custodial accounts, and Roth IRA options for kids.

The 20% Qualified Business Income deduction is now permanent and the phaseout band is wider. For 2026, the joint filer phaseout runs roughly $403,500 to $553,500 of taxable income. S-corps, partnerships, and sole proprietors keep the deduction, and a $400 minimum applies if you have at least $1,000 of business income.

Specified Service Trades or Businesses (SSTBs) include most physician practices, dental, mental health, and consulting work. Once taxable income clears the top of the phaseout, the deduction is gone for SSTBs.

Where your income lands in the band determines how much of the §199A write off you actually keep, so income management around year end matters.

The Child Tax Credit is now $2,200 per child (up from $2,000) and is permanent with annual inflation adjustments. The phaseout still kicks in at $200,000 single / $400,000 joint MAGI, which means many physician households see a reduced credit or none at all.

For 2025 through 2028, interest on a new personal use vehicle loan is deductible up to $10,000 per year. The vehicle has to be assembled in the U.S. and the VIN goes on your return. The deduction phases out above roughly $100k of MAGI single or $200k joint, so most physician households will see a partial benefit at best.

If you financed a new car in the last year, send us the loan details and we’ll see if it helps.

529 plans got more flexible. The K–12 tuition allowance doubles to $20,000 per year per beneficiary, and qualified expenses now include books, online materials, tutoring, and certain post secondary credentials and continuing education.

State conformity varies though, so a 529 withdrawal that is federal qualified may still trigger a state tax hit. We are tracking it state by state for clients with kids in private school.

Two charitable changes for 2026. Non-itemizers can deduct up to $1,000 single / $2,000 joint of cash gifts to qualifying charities above the line. Donor advised funds and private non-operating foundations do not count.

For itemizers (most of our clients), there is a new 0.5% AGI floor on charitable deductions, and taxpayers in the 37% bracket see the deduction value capped at 35%.

If charitable giving is a meaningful piece of your plan, the timing of bunching gifts or funding a DAF is worth a conversation.

Reporting paperwork is lighter. Third party payment platforms (Venmo, PayPal, Stripe, etc.) only issue a 1099-K if you exceed $20,000 and 200 transactions, undoing the brief $600 threshold. The 1099-NEC / 1099-MISC threshold jumps from $600 to $2,000 in 2026.

You still owe tax on every dollar of business income, but you will get fewer forms in the mail.

The federal EV credits and most residential clean energy credits ended in 2025. The $7,500 new EV credit, the used EV credit, and the commercial EV credit are all unavailable for vehicles bought after September 30, 2025. Home solar, energy efficient improvement, and similar residential credits also wound down at the end of 2025.

The §30C credit for home EV charging equipment is still available through June 30, 2026 if you are installing a charger this year.

The Child and Dependent Care Credit got more generous starting in 2026. Top credit rate climbs from 35% to 50% at lower incomes, and the phasedown is gentler so most physician households still keep the 20% minimum credit. Eligible expense caps are unchanged at $3,000 for one dependent or $6,000 for two or more.

If you pay daycare, an after school program, a nanny, or elder care expenses, hold the receipts.

Scam volume always spikes after April. A few rules to live by:

• The IRS does not call, text, email, or DM you out of the blue. First contact is by mail.
• Anyone promising an outsized refund, charging a percentage of your refund, or pressuring you to sign a blank return is a red flag, every time.
• ERC mills are still active and the IRS is actively clawing back bad claims. If a vendor pitches you on a credit you have not heard of, ask us first.
• Syndicated conservation easements and other “listed transactions” are getting heavy scrutiny. We are happy to vet any deduction heavy structure before you sign.

If something feels off, forward it to your tax team. We would much rather take a quick look than unwind a real problem later.

State conformity is uneven. Each state decides whether to follow the federal OBBBA changes, and many haven’t finished. The biggest open questions are 529 expansion, the new charitable rules, and Trump Account treatment. If a withdrawal or contribution is federal qualified, it may still be taxable in your state. We are tracking conformity by state and will flag anything that affects your return.

Multi-state work is a growing audit lane. Locums shifts, telehealth, board work, and post-relocation residency disputes are getting more attention from state tax authorities. A few things that matter:

• Some states have no de minimis threshold, so a single day of work can create a filing obligation.
• If you have relocated, are credentialed in more than one state, or work locums, send us your day count and credentialing list before year end.

OBBBA implementation is ongoing. The IRS is still rolling out guidance on Trump Accounts, the SALT phasedown mechanics, the new charitable floor, and the QBI permanent rules. We are reading every notice and updating our planning playbooks as they come out. If a specific provision affects your return, we will reach out directly.

IRS Direct File expanded. The free federal e-file program is open in more states this season. It is a fine option for very simple returns, but most physician households (multiple W-2s, 1099 income, K-1s, rental property, multi-state) outgrow what Direct File can handle. We mention it because clients ask.

Limited partner self employment tax. A run of recent court cases has eroded the long-held rule that limited partners are exempt from SE tax on their share of partnership income. Courts are looking past the “limited” label and asking whether the partner is actively running the business. If you are a partner in an LLC or LP and you do meaningful work in the business, this is worth a conversation.

2026 figures worth bookmarking:

• Business mileage: 72.5¢ / mile (up from 70¢)
• Gift tax annual exclusion: $19,000 per recipient
• Estate tax exemption: $15M individual / $30M joint under OBBBA
• IRA contribution: $7,500 (+$1,100 catch-up at 50+)
• HSA contribution: $4,400 self-only / $8,750 family

Short Term Rental (STR) loophole. If you materially participate in a property with an average guest stay of 7 days or less, losses can offset W-2 and 1099 income without qualifying as a real estate professional. It is a real strategy, but the material participation tests are strict and the documentation burden is real. Done wrong, it is an audit magnet.

Real Estate Professional Status (REPS). Still the cleanest path to using rental losses against active income for households where one spouse can hit the 750 hour and majority of personal services tests. Most dual physician households cannot hit it, but if one spouse has reduced hours or has stepped away from medicine, this is worth a sit down. Just remember, in addition to the 750 hours and majority personal service tests, you must also material participate in the real estate activities in order to utilize the losses.

Cost segregation + bonus depreciation. 100% bonus depreciation is back permanently under OBBBA for property placed in service after January 19, 2025. Cost seg studies on physician owned medical office buildings, surgery centers, and rentals are getting more economical to run again.

1031 exchanges. Still the workhorse for deferring gain on investment real estate. The 45 day identification and 180 day closing windows have not changed; what has changed is how aggressively the IRS is reviewing related party and reverse exchanges. Loop us in before you list, not after.