Wealthyist E80 | Turning The Page: Roth, State & Local Taxes, and the Moves That Matter Before 2026 Ends

This episode of Wealthyist features Kent Halleen, wealth manager at Annex Private Client, with Jenny Jesse, manager of the financial planning team and principal author of Annex’s year-end guide, Turning the Page on 2026. Jessee has been at Annex Wealth Management about five years, starting as a college intern and moving through specialist and senior planner roles. Her focus is creative strategy for clients now that the Tax Cuts and Jobs Act provisions are no longer facing a sunset, thanks to the One Big Beautiful Bill.With rates locked in for the planning horizon, Roth conversions are a frequent recommendation, especially in the 12%, 22%, and 24% brackets. The higher State And Local Tax (SALT) cap is another lever: state and local taxes can include state income tax, property tax on a primary or vacation home, and, in no-income-tax states, sales tax.The changes are federal, though some states (Arizona is cited) have adopted pieces such as relief on tips, overtime, or an enhanced senior deduction. Itemizing remains less common than in prior decades unless SALT, medical costs, or large charitable gifts push a return over the standard deduction.New 2026 rules get close attention. Catch-up 401(k) contributions for those 50 and older must go to Roth if prior-year W-2 wages exceeded $150,000—a revenue offset for other tax cuts. Trump accounts (set up only through the official app or IRS Form 4547, not unsolicited emails) function as a child retirement vehicle; children born 2025–2028 can receive a $1,000 government seed, and balances can later be converted to Roth once the child has earned income. Leftover 529 funds can also move to Roth, subject to a roughly $35,000 lifetime cap and annual earned-income limits, not as a single bulk rollover.On estates, the federal exemption is $15 million per person ($30 million joint), which removes many families from estate-tax concern, though lifetime gifts and “living legacy” transfers still matter for larger estates or when heirs can use money sooner. Gifts above the $19,000 annual exclusion are not immediately taxed; they use lifetime exemption and are reported on a gift-tax return. Some states, notably Illinois, keep much lower exemptions.Charitable tactics include donor-advised funds funded with appreciated stock (unchanged in structure, but now subject to a 0.5% of Adjusted Gross Income (AGI) deduction floor) and qualified charitable distributions from Individual Retirement Accounts up to $111,000 once the owner is 70½.Qualified Charitable Distributions (QCDs) can satisfy Required Minimum Distributions (RMDs)—age 73 for those born 1959 or earlier, 75 for those born 1960 or later—while keeping AGI lower for Income-Related Monthly Adjustment Amount (IRMAA), Social Security taxation, and the new senior deduction. Non-itemizers can also claim a new cash charity deduction of $1,000 single / $2,000 joint.The guide is at annexwealth.com. Jesse’s closing point is that the goal is lifetime (and family-unit) tax minimization, not just this year’s return—something Annex approaches with pro forma tax projections tied to investments and estate plans.