Why April 16th is Opening Day of Tax Planning: Using Your 1040 as a Roadmap
Episode 30
Why April 16th is Opening Day of Tax Planning: Using Your 1040 as a Roadmap
Published on April 7th, 2026
Episode Summary
Episode 30 of Retirement Tax Matters reframes the April 15th filing deadline as the Opening Day for a retiree’s 2026 tax planning strategy. For high-net-worth retirees and their families in the $2M–$8M range, Garrett Crawford, CFP® explains why the tax return is not a historical receipt but a roadmap that leads the upcoming year’s proactive planning. The conversation details how an early income projection in the Spring allows retirees to build a Roth Conversion plan, giving them the psychological readiness to capture market dips. Garrett clarifies that a professional review of a recently filed 1040 is a confirmation process, not an audit of the CPA, usually aimed at catching communication gaps in strategies like Qualified Charitable Distributions (QCDs) or capital loss carryovers. This integrated approach ensures that complex technical decisions are executed correctly well before the immovable December 31st deadline, providing better peace of mind for the upcoming year ahead.
Key Tax Planning Questions
Question 1: When should retirees start planning for next year’s taxes?
For many retirees, the months of February and March are dedicated to the process of filing your tax return. You gather tax forms, coordinate with your preparer, and once that confirmation arrives, you can often think of that as the end of tax season. However, the way I see it, filing your return on April 15th means that the next day (April 16th) is the start next year’s tax planning year. We (and you should too!) want to ensure that the strategic moves made during the year were recorded accurately on the final return.
One of the biggest mistakes I see high-net-worth retirees make is moving on from tax season and not thinking about it again until the following February. Starting your tax and financial planning in April or May allows you to build a rough income tax projection for December while the numbers are still fresh. This is important so that you can navigate complex rules like Medicare IRMAA cliffs, Net Investment Income Tax thresholds, and projected capital gains from large brokerage accounts . Waiting until the fall to look at these numbers often results in decision scramble or decision paralysis when the window for acting is closing.
By establishing your strategy in the spring, I’ve seen where retirees are quicker to act when market opportunities present themselves. In essence, playing offense is easier when you have a plan! If the market provides a discount in the summer, you already have a general Roth conversion plan in place and can execute with confidence while stock prices are deflated.
Question 2: How to use a 1040 tax return for financial planning?
As a financial planner, I’m not a licensed tax preparer. I do not prepare tax returns for my clients and do not represent them in tax matters in court. But I do believe the financial planner is ideally positioned to help retirees lead the tax planning process for their clients for the upcoming year. Most good financial planners have in their notes how much you are receiving from Social Security, how much you are receiving from pre-tax and Roth IRAs, and have access to capital gains and dividends from your brokerage accounts. Good financial planners are also having extended conversations with you about your value system and how to balance your financial and life goals and educating you on trade-offs. I believe tax-return driven financial planning is a process where a financial planner is not substituting as a CPA but instead reviewing your tax return each year, becoming familiar with how income and deductions and credits are flowing through your tax return.
The trick with using last year's tax return as a source for this year's proactive financial planning is realizing that this year will be unique and different from last year. Maybe on last year's tax return you sold a house, or made a big liquidation from capital gains that triggered a large short-term capital gain. Where tax preparers and financial planners go wrong is not going the extra step to have a conversation with their clients about what is changing for the current year. If you always assume the upcoming year will be like last year's tax return, you'll eventually make financial decisions that run counter to your goals.
I believe over the course of many years of reviewing your tax returns a good financial planner will start to pick up on the rhythm of what a normal income year looks like for you and then capitalize on those years when income is low. If you aren't keeping track of marginal and effective tax rates and acknowledging how RMDs down the road or a passing of a spouse may impact your tax brackets, you're going to make different financial planning decisions. If you have a financial advisor or investment person and they haven't asked to see a copy of your tax return recently, it's maybe a good time to evaluate are you getting good value for the fee you're paying.
Question 3: I'm 68 years old and my wife is 64. We’re very confident we have enough to retire comfortably with a retirement portfolio of $2M, but when I retire, I would sell my business which is probably worth another $2M. We have no debt, and I've been thinking about taking my Social Security. Our health is good, but the prospects of my business growing if I keep at it a few more years is alluring. I keep thinking this is the year to retire, but then I keep saying, 'If I work one more year, it will be worth it.' Do you have any thoughts? We have no debt, but aren't quite sure when it makes sense to retire.
I have a few of these clients where the amount of money their lifestyle requires is significantly short of the portfolio income they could generate. While early in retirement they are still in the mode of wanting to make sure they have enough, they hit the back half of their 70s, they don't have any debt, and they realize that this money might have another decade or two of growth in the market and a lot of it will end up with the kids. As their pre-tax investments grow, it only compounds the issue of having more than they need.
Depending on your income, you may find yourself in a Medicare IRMAA situation where if your income increases a little you get hit with a significant IRMAA penalty that makes you hesitate to take out more money. If each year you attempt to max out your tax bracket up to the 22% or 24% or higher, you may find that you will get hit with an IRMAA penalty every year.
In one sense, that’s usually not the end of the world. For many clients, I would encourage them to take the additional money out even with the IRMAA charge to make sure while they are alive and able to enjoy it. Maybe they give a little more to family members, friends or their church now and experience the joy of giving generously.
But maybe you already do enough giving and your goal is optimizing assets for long-term growth for kids. Or maybe you have a child with a disability that you are wanting to fund a trust for at the end of your life and getting the most money in there is the goal. One thing I have had clients consider is during our April estimate of income, I will say they are a candidate for fewer Roth conversions, but when they do it, they really go big and blow through some IRMAA brackets.
If you haven't looked at an IRMAA bracket closely, the next to highest IRMAA bracket is really large compared to the other IRMAA thresholds: between $410,001 and $749,999 in 2026. There are situations where it could make sense to be on the lookout for a significant market drop and use that as an opportunity when stocks go on sale to do a really large Roth conversion and be okay triggering one big year of IRMAA penalty premiums . This is because Medicare IRMAA penalties are only for one year and fall off or decrease the following year if your income drops back down. This is a scenario that is highly dependent on your unique circumstances, especially your ordinary income and capital gain income.
Full Episode Transcript
Adam: Good morning and welcome to Retirement Tax Matters. I'm Adam Reed. This is Garrett Crawford, our resident CFP® professional. How are we doing this morning, Garrett?
Garrett: Doing pretty good today. Recording this the first week of April. That makes me think of a couple of things. I know we usually talk about taxes and the weather.
Adam: The weather, taxes, and the weather. We always kick off with that.
Garrett: But April, actually, my mom's a huge baseball fan—but opening day. This time of year when I was a kid, I played baseball. Huge Braves fan. But a lot of you listeners out there did not know that I sit next to a college athlete who also played baseball. I was curious if April meant opening day for you as a kid growing up?
Adam: Yeah. Back a few years ago, I was a college athlete. Now they call me "washed up." Yesterday, throwing some balls at the kids in the front yard, my shoulder's a little tight this morning. I'm not quite what I used to be. But yeah, opening day. I feel like you've put in all this work all fall, and I feel like it's kind of similar to our work. It's like you do all this projection, all this planning, and then opening day is kind of like the payoff. You get to see that tax return and say, "Hey, we nailed it. We nailed those Roth conversions." But now we get to work on the next year. It’s a long season. So there are definitely some parallels.
Garrett: That's probably why you made it to the college level. I remember I didn't prep any for baseball season, and I would come into April and remember my arm would hurt and I couldn't throw. But it was also funny how quick you can build up those muscles as a kid.
Adam: Well, I'm sure some people searching our content feel the same way. They're looking like, "How do I prepare better for next year because I just got my tax return back and I'm not pleased," or "I had a surprise," or "Oh my goodness, that Roth conversion hit my chart." Everything hit. There are probably people feeling both ways: "I was prepared, I crushed it," or "Oh my gosh, what am I doing? I gotta listen to Adam and Garrett Crawford, CFP® more."
Garrett: And I was so thrilled when you rejected the Yankees and the Braves offer to jump from the college level to join here at Providence. That was great that you felt this call to tax planning.
Adam: Yeah, it was hard. I was wanting to play alongside Shohei Ohtani, but they'd only do 750 million and I said, "I gotta be the highest-paid guy on the team or I'm not playing." So, I settled for this.
Garrett: Okay. So opening day, give us an intro here.
Adam: Opening day. For a lot of clients, this is going to come out about a week before April 15th. A lot of you probably have already filed your tax returns. I know we've reached out to clients and said, "Hey, send us in tax returns as you get them." The emails are already flooding in, the secure upload links are active, and so a lot of you have already accomplished the task. But April 15th is coming up, which is the tax deadline. Really, what that is is Opening Day. I think for us, for the do-it-yourselfers out there, and for people working with advisors, it’s the time to say, "The season is starting. What can I do? What's the framework?" We talk about this tax-return driven financial planning to make sure we don't feel like the IRS is our biggest beneficiary in retirement for people in this 2 million to 8 million dollar range. But what does that really mean? Can you build us a framework? Let's just say for this year, for somebody in 2026, I want to do this thing right. Maybe I had some surprises or maybe I crushed it and I want to crush it again. What is the framework for tax-return driven financial planning for those people in 2026?
Garrett: Yeah, and I'm right there with you. I think we talk about this idea of tax-return driven financial planning. To me, it sounds so natural. I remember when you and I were at a conference one time and you slid a note over and you were like, "Hey, this is what we should call it." I'm not sure that I see this term out there everywhere, but I think it's really form-fitting. Because we made it up, I think it's worth our time to do a few of these episodes seasonally as we dive into what is tax-return driven financial planning. A little quick plug for the newsletter: if you go to our website and sign up, I have a few automated emails where I describe this framework that we've put into place. It's really based on season. This is the spring of 2026, and the spring is when we want to start thinking about the upcoming year. For a lot of people, our clients included, when you get that tax preparer signature or you submit through TurboTax, you kind of wipe that sweat off your brow and move past April 15th. It’s April 16th and you start thinking about spring break or the kids getting out of school. But for you and I, this week is representative of the opposite. I had more tax returns than I can count flood into our secure upload portal from clients. We sent out an email, and it’s like the first week of a Major League Baseball season. I've got a lot of tax returns to read through, review, and make sure that the planning we did last year actually ended up on the tax return. So, while a lot of you get a little break, the way we do it here in the office is that April 16th is the beginning. Why is that important? Why do we start on April 16th thinking about the upcoming year? One, there's going to be a lot that happens for you between April and December. You're going to have changes from what happened last year to this year. You may need more money, or you may need less money. You may have retired, or you may have retirement on the horizon. We're coming into a 2026 where the market has been down because of the oil issue, the Iran war, there's been a lot. The question for a lot of retirees is: "How do I take advantage of that?" I would say it starts with setting up an income projection for the upcoming year. Our framework is that we have clients upload their tax returns to us at the beginning of April. We get a copy and then we begin reviewing it. What I like to call this is an early income projection for the end of the year. There are still eight months before December.
Adam: You're telling me something might change in somebody's life between now and the end of the year?
Garrett: For some people. Some people are pretty rhythmic, but for most people, things change. Financial planning and tax planning for a lot of retirees between 2 million and 8 million dollars involves large brokerage accounts that are going to be kicking off capital gains, dividends, and interest. Those can be really hard to project in April. But I still think the first step of this tax-return driven financial planning is to make an early estimate. Even though we know we can't predict everything, it can inform some of our financial planning for the rest of the year.
Adam: Yeah, absolutely. I think it's helpful for people just to have that on their radar because it informs everything. That first projection is what can move the needle on whether we need to look at Roth conversions or maybe holding off on that big purchase until next year. What do we need to do in light of where our income's landing? Or maybe we've got tons of extra room. I know you sat down with clients just in the past couple of weeks and said, "Hey, you guys need to be spending more money. You guys are in a great spot." That’s a good thing to hear. I think a lot of the people we work with have trouble being reminded, "Hey, spend a little more, you've got room." We just did your income projection and you're not going to sneak up into that 32% tax bracket. But set the stage for me; coming out of income projections, give us some thoughts on Roth conversions. What does that look like? Are you doing those now? Is that something where you say, "Let’s do the income projections, have an idea in mind, and we'll chip away at them?" How do you approach those as you look at your year?
Garrett: Bias admitted as a financial planner: I love Roth conversions. I think it's the best way to accelerate future income, which can be in the form of RMDs. Growing accounts mean growing RMDs. It's one of the best ways we can solve a future tax problem by accelerating that income into this year, 2026. With Roth conversions, a lot of times with our clients, we're going to have a goal. Maybe they're midway through the 22% or in the early part of the 24% tax bracket. There can be a strong incentive, with the way the tax brackets are structured, to consider doing a Roth conversion up to the top of those brackets. I've had multiple meetings this year with clients who have huge traditional IRA balances. They need help with spending because they're great savers. They've always lived below their means, and those habits can get out of hand when they get into retirement. They've got the ability to generate 15,000 a month, but they’re used to living on 8,000 or 10,000. They keep their standard of living going while their IRAs are growing with compound interest. That can present a real tax problem. While they are comfortably in a 22% tax bracket now, the future decades ahead may not be so kind; they may end up in the 32% or 35% bracket. So, in the spring, even though we don't know the rest of the year, we need to start putting a plan in place. How much approximately might we convert to Roth? What's sensible? What would get us to the top of the 24% bracket? This conversation even extends higher. Maybe you're currently in the 32% bracket but see 35% or 37% on the horizon. Can we take advantage of that now? The reason I like to do this in the spring as opposed to waiting until the fall is that we've had times—and I think back to 2020 when COVID happened—where markets were a mess. It was significant. That was a crisis. In the moment, the economy basically shut down. Thankfully, six years away from that event, it's different. But my point is that some of these hard-to-predict market events happen when we don't have a plan in place. That was a crazy month for us as financial planners. For those clients who didn't have a Roth conversion plan in place, it was harder. The clients we had already spoken to about the need for a Roth conversion had a much easier time. It didn't feel reactive to the situation. The earlier you can predict your income for December, the better. If a market opportunity presents itself where values drop, you can capitalize on that much quicker than if you wait until an event happens and then you've got all these fears. You might think, "I wasn't expecting this, do I really want to do a Roth?" versus the appointment I had the other day where we talked about having room for a 150,000 or 175,000 dollar Roth conversion. We did a small amount this week, but it was basically planting the seed of a number. By the end of the year, if the market goes down further, it doesn't seem as wild when I say, "Hey, I think we ought to do a 150,000 dollar Roth conversion." If you're processing a market downturn and feeling insecure, you have to be psychologically ready. Down markets are a wonderful opportunity for a Roth conversion. I tell clients all the time: we are doing an income projection now and planting the seed for if something happens between now and November or October. We need to be ready. Clients who do the pre-planning upfront have more peace of mind when markets are choppy because they knew that was the plan from the beginning.
Adam: Yeah. I think people like playing offense when they would normally be playing defense. I’m going to butcher this quote, but it's something like: plans rarely go the way we plan them, but planning is the most important thing we can do. We have to be planning, but something's probably going to change. The market changes, a home purchase happens, or you need a new roof. Things change all year long. But if we're not planning at all, we're setting ourselves behind the eight ball. When an opportunity arises, we're scrambling for documents. At that point, it may be too late. Last year, the market was down on April 18th and then shot back up 10% the next day. If you're ready to go and you're locked in, you hit the trigger and you're good.
Garrett: A lot of people listening might think, "I don't want to do that planning." That’s an argument for working with a financial planner. You can delegate all that planning away to someone else so they have to watch the details. That is the benefit of a great tax-return driven financial planner: you actually don't have to do all the planning yourself.
Adam: One last topic: when we're reviewing tax returns, what are we really doing? Are we auditing the CPA? I think this has been the first year we’ve made a big push for all of our clients to send these in. Why are we doing this? What's the purpose? If someone is doing it themselves, what is their goal when they receive that tax return? Is it an audit? Are they confirming things?
Garrett: I'm a CFP® professional. Adam is almost halfway there. CERTIFIED FINANCIAL PLANNER® professionals have educational requirements focused on tax planning. We are not tax preparers; I don't want to get into that world. I am not giving specific tax advice or representing clients in court. This tax return review is not me double-checking the CPA to see if they made mistakes. I rarely find mistakes from the CPA. Usually, they’re better at that than I am. Most mistakes on a tax return are communication issues—between me and the client, or the client and the CPA. Maybe they get a tax letter from Schwab and don't realize it's important, so the CPA never knows about it. Or the "Code 7" trap with QCDs on a 1099-R. The form doesn't tell the preparer it was a QCD. Most things that pop up as "incorrect" have roots in communication. We encourage our clients to let us be a liaison with the CPA. We aren't preparing the taxes, but we can help make a gray area more black and white.
Adam: Sometimes opening that channel of communication is helpful. It’s like playing a game of telephone otherwise. Our clients are brilliant, but sometimes we're all speaking different languages—one Mandarin, one Russian. It’s complex.
Garrett: Our main goal is to ensure the financial planning conversations we’re having now, on "opening day" in April, actually make it to the tax return in December. Whether it's Roth conversions, non-deductible IRA contributions, QCDs, or long-term capital gain harvesting, our goal is two-fold. First, ensure nothing is missed due to communication issues. Second, let the tax return drive the financial planning for the rest of the year. I like to ask clients, "When was the last time your investment advisor asked to see a copy of your tax return?" Most say never. Then I ask, "When was the last time you felt their advice was impacted by reading your return?" Usually, that hasn't happened either. We aren't checking every line of a hundred-page return. We’re looking for the big things—a side business you didn't mention, or an income spike from an inherited IRA. We want to factor in everything you might think is inconsequential and implement it into the current year's plan. Opening day is a really important part of the process and sets the foundation for everything we do.
Adam: I think just like Major League Baseball players, there are probably some nerves and some excitement. Maybe you love planning and spreadsheets, or maybe you don't know where to start. You can book a call with us if you want to work hand-in-hand, but if you're a do-it-yourselfer or just want to learn more, I recommend the year-end tax planning checklist on our website. Go to retirementtaxmatters.com and check it out. Garrett Crawford, CFP® sends out awesome content each week with anecdotal stories and technical analysis. This is the perfect time of year to calm those pre-opening day nerves. Check out our resources and continue to follow, like, and subscribe on YouTube, Apple, and Spotify. Garrett, I appreciate you. We’re looking forward to tax-return driven financial planning opening day.
Garrett: I think this episode was a home run.
Adam: We gotta cut it off there. Thank y'all for joining us. I'm Adam Reed and this is Garrett Crawford. We're Retirement Tax Matters.