At Nicollet Investment Management, Inc., we perform a comprehensive review of twelve key elements from your tax return to identify meaningful tax planning opportunities. Our Tax Analysis Summary delivers clear insights and actionable recommendations, empowering you to optimize your current tax situation and strengthen your long-term financial strategy.

Here’s what we analyze:

1. Marginal Tax Rate
   We identify your marginal tax rate—the rate applied to your next dollar of income. This reveals your current federal tax bracket and highlights opportunities such as strategic timing of IRA distributions, Roth conversions, or other income-shifting strategies during lower-bracket years.
2. Average Tax Rate
   We calculate your average (effective) tax rate by dividing your total tax liability by your total income. This provides a transparent view of your overall tax burden and helps evaluate the true cost of various planning decisions.
3. Tax Loss Carryforwards
   We review any capital loss carryforwards from prior years. These can offset future capital gains dollar-for-dollar and up to $3,000 of ordinary income annually ($1,500 if married filing separately), creating ongoing opportunities to reduce taxable income.
4. IRMAA Surcharges
   We assess potential Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Part B and Part D premiums. These surcharges are determined by your modified adjusted gross income (MAGI) from two years earlier and can significantly increase healthcare costs. Proactive income planning can often help mitigate or avoid them.
5. Capital Gains
   We evaluate your long-term capital gains, which qualify for preferential tax rates (0%, 15%, or 20%) that are typically much lower than ordinary income rates. Strategic timing of asset sales, loss harvesting, and gain management can minimize taxes and improve after-tax returns.
6. Qualified Dividends
   We analyze the portion of your dividends that qualify for favorable long-term capital gains tax rates. Increasing the percentage of qualified dividends in your portfolio enhances overall tax efficiency and can generate meaningful savings.
7. Roth Conversion Opportunities
   Using advanced modeling, we identify optimal years and amounts for Roth conversions. Converting during lower tax bracket periods can expand tax-free growth, reduce future required minimum distributions (RMDs), lower lifetime taxes, and increase retirement flexibility.
8. Itemized vs. Standard Deduction
   We compare the benefits of itemizing versus taking the standard deduction. For 2026, the base standard deduction is $16,100 for single filers (or married filing separately) and $32,200 for married filing jointly.

Taxpayers age 65 or older (or blind) qualify for an additional standard deduction: $2,050 for single filers or $1,650 per qualifying spouse on a joint return.

In addition, under the One Big Beautiful Bill Act, eligible seniors can claim a new temporary enhanced senior deduction of $6,000 per person (up to $12,000 for married filing jointly if both spouses are 65+). This extra deduction stacks with the base and traditional age-based amounts but phases out for higher-income taxpayers (beginning at approximately $75,000 MAGI for single filers or $150,000 for joint filers).

Strategies such as deduction bunching—grouping deductible expenses (e.g., charitable gifts, medical costs, or property taxes) into a single year—can help you exceed the standard deduction when beneficial.

9. Net Investment Income (NII) Tax
   We review your exposure to the additional 3.8% Net Investment Income Tax, which applies when modified adjusted gross income (MAGI) exceeds $200,000 (single or head of household) or $250,000 (married filing jointly). Targeted planning can help manage or reduce this surtax on investment income.
10. Qualified Business Income (QBI) Deduction
    We evaluate eligibility for the 20% Qualified Business Income deduction available to owners of pass-through entities. We also consider the new $400 minimum deduction (for those with at least $1,000 of QBI) and updated phase-out ranges. Proper structuring and documentation can substantially lower taxable income for eligible business owners.
11. Phaseouts, Credits, and Deductions
    We examine how your income level affects the phaseout of various tax credits and deductions. With numerous credits available, we help ensure you claim every benefit for which you qualify while identifying strategies to minimize phaseout impacts.
12. Overall Tax Return Insights
    Your tax return offers the most accurate snapshot of your income, deductions, credits, and payments. We analyze these twelve elements holistically to provide clear, prioritized recommendations tailored to your unique financial goals and circumstances.

At Nicollet Investment Management, we take tax return analysis seriously. Our goal is to transform complex tax data into practical, easy-to-understand insights that support confident decision-making and enhance your financial future.

We look forward to reviewing your personalized Tax Analysis Summary with you and discussing how these opportunities can be integrated into your broader wealth plan.

Important Disclaimer

This Tax Analysis Summary is for informational and educational purposes only. It is not intended as tax, legal, or investment advice. Tax laws and regulations are complex and subject to change. Individual results may vary based on your specific circumstances, filing status, income level, and other factors. Nicollet Investment Management, Inc. does not provide tax or legal services. We strongly recommend that you consult with a qualified tax professional (such as a CPA) and your estate planning attorney before implementing any tax strategies. Past performance is not indicative of future results.

“This white paper is provided for informational and educational purposes only and does not constitute investment advice, legal advice, or tax advice, and should not be relied upon as such. The information contained herein is believed to be from reliable sources but is not guaranteed as to accuracy or completeness, and the adviser undertakes no obligation to update or revise this material to reflect subsequent events or circumstances. Investing involves risk, including the possible loss of principal; past performance is not indicative of future results. Advisory recommendations are subject to individual suitability considerations, and this material may not be appropriate for all investors. Registration as an investment adviser does not imply any particular level of skill or training. Prospective clients should consult with qualified legal, tax, and financial professionals before making any investment decision and should carefully review the adviser’s Form ADV prior to engaging advisory services.”