As 2026 tax deadlines approach, now is an ideal time to work with your financial advisor and review how taxes may be impacting your investment portfolio. A coordinated strategy between you, your advisor, and your tax professional can significantly impact your after-tax returns.
Here are some tax-aware strategies you may want to review:
Tax-Efficient Gifting and Charitable Giving
Gift and estate taxes1 apply to large transfers of money, property, and other assets you make during your lifetime or you plan to leave to heirs. The federal lifetime gift tax exemption2, which is adjusted annually for inflation, enables you to transfer a significant amount before federal gift taxes apply. Current federal gift tax rates range from 18% to 40%.3 State rules may also apply.
For charitable goals, donor-advised funds4 (DAFs) can be a flexible, convenient, and strategic way to support charitable causes over the long term. DAFs are charitable giving accounts managed by a 501(c)(3) sponsoring organization, which has legal control of the assets. You can make a contribution, receive an immediate tax deduction, and recommend how and when donations are invested and distributed to charities over time.
Tax-Loss Harvesting
With tax-loss harvesting, you can offset unrealized capital gains by selling investments that have declined in value to counterbalance stocks with gains.
This strategy may be especially beneficial for those who:
- have significant realized capital gains
- hold substantial assets in taxable accounts
- maintain a long-term buy-and-hold investment approach
When executed intentionally, harvesting losses can potentially improve after-tax portfolio outcomes without changing your overall investment strategy.
Direct Indexing
One of the appeals of direct indexing solutions is that they allow for more flexibility around tax-loss harvesting. Instead of owning a single index fund, you directly own the individual stocks within an index.
This approach may create more opportunities to harvest losses at the individual stock level—helping offset gains elsewhere in your portfolio while maintaining broader market exposure.
Asset Location Optimization
If you’re getting a late start on your retirement savings plan, there’s no need to panic. Many people don’t begin Not all investments and accounts are taxed the same. This tax-minimization strategy aims to strategically place investments across taxable and tax-advantaged accounts where they may be most tax efficient.
Strategically placing investments in the right accounts—appreciating assets in taxable accounts and tax-inefficient assets and high-growth investments in Roth IRAs—can help defer or potentially eliminate taxes and maximize long-term after-tax results.
Tax Diversification
Similar to asset location optimization, tax diversification reduces risk by strategically spreading assets throughout numerous investment accounts with differing taxation, such as:
IRA Accounts — tax-advantaged retirement accounts
Traditional IRAs offer tax-deductible contributions and tax-deferred growth; withdrawals are taxed. Roth IRAs use after-tax contributions and offer tax-free qualified withdrawals.
401(k) Plans — employer-sponsored retirement plans
Traditional 401(k) plans are pre-tax dollars with tax-deferred growth; withdrawals are taxed. Roth 401(k) plans use after-tax contributions with tax-free qualified withdrawals.
Health Savings Accounts (HSAs) — tax-advantaged accounts for medical expenses
HSAs offer a triple tax benefit: Contributions are pre-tax or tax-deductible, growth is tax-free, and qualified medical withdrawals are also tax-free.
529 College Savings Plans — education savings accounts
Contributions aren’t federally tax-deductible (some states offer tax benefits), growth is tax-deferred, and qualified educational withdrawals are tax-free.
Tax diversification can provide more control over how and when you recognize income later in life.
Planning That Evolves With You
The tax landscape continues to change, markets fluctuate, and your life continues to evolve. That’s why it’s important to work with a financial advisor who can thoughtfully coordinate your investment strategy with your unique tax situation.
Commentary provided in collaboration with Symmetry Partners, LLC. Symmetry Partners and Axis Wealth Partners are unaffiliated entities. Symmetry Partners is an investment advisory firm registered with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investing in securities involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. Content is provided for informational purposes only and is not advice. Neither Symmetry partners nor Axis Wealth Partners provides tax or legal advice. Discuss all strategies mentioned with a qualified professional prior to implementation.
- Estate and Gift Tax FAQs, IRS, https://www.irs.gov/newsroom/estate-and-gift-tax-faqs ↩︎
- Geier, B., “What is the Lifetime Gift Tax Exemption?” SmartAsset Advisors, LLC, January 26, 2026,
https://smartasset.com/retirement/lifetime-gift-tax-exemption ↩︎ - Taylor, K., “What is the Gift Tax Exclusion for 2025 and 2026?”, Kiplinger, January 2026,
https://www.kiplinger.com/taxes/gift-tax-exclusion ↩︎ - Donor-Advised Funds, IRS, https://www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds ↩︎