Changes to adjusted gross income, or AGI, can affect a range of tax benefits, including the premium tax credit<\/a>, which makes Affordable Care Act\u00a0marketplace health insurance cheaper. <\/p>\n While Congress boosted the credit during the pandemic, the enhanced benefit expired after 2025, exposing millions of Americans to the so-called “ACA cliff<\/a>” starting in 2026. That means if they earn even $1<\/a> more than a certain income threshold, they lose all eligibility for subsidies and must pay the full premium for health coverage.<\/p>\n “This is the first year the ACA cliff really matters,” said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. His firm is ranked No. 44 on CNBC’s Financial Advisor 100<\/a> list for 2026.\u00a0<\/p>\n The cliff affects ACA enrollees once household income exceeds 400% of the federal poverty line threshold, which varies by family size. For 2026, those limits are about $63,000 for a single person or $129,000 for a family of four. <\/p>\n But there are strategies to avoid “falling off the cliff,” such as pairing a high-deduction health plan with health savings account <\/a>contributions, which reduce your AGI, Lucas said. <\/p>\n Leverage the charitable deduction <\/p>\n Starting in 2026, Trump’s legislation also added a charitable deduction<\/a> for filers who don’t itemize tax breaks, worth up to $1,000 for single filers and $2,000 for married couples. The deduction applies to cash contributions<\/a> made to eligible nonprofit organizations.<\/p>\n A $2,000 deduction reduces your income subject to tax. For example, if a married couple filing jointly in the 22% tax bracket donates $2,000, they could reduce federal income taxes by up to $440.<\/p>\n If you claim the deduction for 2026, you could have “a little bit more room” to potentially offset moves that add to your taxable income, such as selling profitable investments or making Roth conversions<\/a>, Lucas said.<\/p>\n Transfer assets to a donor-advised fund<\/p>\n If you itemize deductions and give to charity, Trump’s legislation added two changes that could reduce your benefit. <\/p>\n For 2026, there’s a charitable deduction “floor” for itemizers,\u00a0which allows the tax break only once your donations exceed 0.5% of AGI. There wasn’t a floor before the 2025 tax law.<\/p>\n For example, if your AGI is $200,000 and you donate $10,000 in 2026, the 0.5% floor, or the first $1,000, isn’t eligible for the charitable deduction.<\/p>\n Trump’s legislation also limits the deduction for top-earning households in the 37% top marginal income tax rate by effectively capping the tax break at 35%.<\/p>\n![\"Tax](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/10\/108253287-5ED1-REQ-011526-401kLIMITS.jpg\")
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