Fidelity's 2026 Playbook: Roth Conversions, a New Senior Deduction and RMD Timing

Fidelity closed out 2025 with a year-end checklist of tax moves for 2026, the first full year under the tax law signed in July 2025. For households still working through Roth conversions, required minimum distributions and year-end giving, the guidance is a reminder that several of the law's new breaks are temporary, income-limited, and easy to miss without planning ahead of the April 2027 filing deadline for 2026 returns.

What changed

Two provisions dominate the 2026 checklist. The first is a new deduction of up to $6,000 for taxpayers who are 65 or older by year-end, or $12,000 for a married couple if both spouses qualify, available whether or not a household itemizes. The IRS has confirmed it runs alongside the existing extra standard deduction for seniors, not in place of it, and applies for tax years 2025 through 2028. The second is the required minimum distribution schedule under SECURE 2.0: the RMD start age is 73 through 2032 and rises to 75 in 2033, with the first RMD deferrable to April 1 of the following year and every RMD after that due by December 31.

Who is affected

The senior deduction phases out for modified adjusted gross income above $75,000 for single filers and $150,000 for joint filers, which puts it out of reach for many affluent retirees with pensions, taxable investment income or early Roth-conversion income stacked into the same year. Fidelity's guidance flags market pullbacks as a natural trigger for Roth conversions, since converting when account values are temporarily depressed means paying tax on a smaller balance while the eventual qualified withdrawals stay income-tax-free. That timing matters most for retirees in the years between leaving work and the start of RMDs, when taxable income is often at its lowest.

The after-tax math

Example: a married couple, both 66, with $140,000 of MAGI from Social Security and portfolio income sits just under the $150,000 senior-deduction phase-out and can claim the full $12,000 deduction. If the same couple converts $60,000 of a traditional IRA to a Roth in the same year, MAGI rises to $200,000, pushing them past the threshold and eliminating the senior deduction entirely on top of the tax due on the conversion itself. Modeling the conversion amount against this threshold before year-end, rather than converting a round number, is the difference between keeping the deduction and losing it.

Charitable and estate timing

Fidelity's checklist also covers giving rules taking effect in 2026. Non-itemizers can now deduct up to $1,000 (single) or $2,000 (joint) in cash gifts to charity even without itemizing, a permanent, non-indexed benefit. Itemizers face a new offset: charitable deductions are reduced by an amount equal to 0.5% of the donor's contribution base, and the value of the deduction for taxpayers in the top 37% bracket is effectively capped at a 35% benefit rate. For donors who bunch several years of giving into one tax year, this makes the timing of large gifts, including donor-advised fund contributions, more consequential than in prior years.

Moves to discuss with your advisor

• Whether a partial Roth conversion this year keeps household MAGI under the $75,000/$150,000 senior-deduction threshold, or whether the deduction is already out of reach.
• Whether RMDs, Social Security claiming and any conversion income should be sequenced across several years rather than concentrated in one.
• Whether bunching charitable gifts into a single year, including through a donor-advised fund, offsets the new itemizer haircut on deductions.

What to watch

The senior deduction, the SALT cap expansion and several other 2025 tax-law provisions are scheduled to expire after 2028 under current law, which means the planning window for locking in Roth conversions at today's lower brackets is finite. A household that waits until the mid-2030s to convert, once the top bracket structure could look different and RMDs have already started at 73, loses the flexibility to control which year absorbs the converted income. Fidelity's own 2026 money moves guidance and the IRS's official rules for the law are the two references households and their advisors are working from heading into filing season.

None of these provisions require action before December 31; the senior deduction and the charitable rules apply automatically when a 2026 return is filed, and RMDs are calculated by the account custodian each year. The planning decision that does have a deadline is the size and timing of any Roth conversion, since it is irreversible once processed and directly changes the MAGI figure that determines whether the senior deduction survives.

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