Individual Strategies

If you spend any time in the world of cross-border taxes, you start to notice a pattern: the hardest problems usually begin with a deceptively simple question—who gets to tax you? And the answer is rarely as simple as “the country where I live.” That’s because tax systems don’t rely on just one concept to decide who belongs in their net. They use citizenship, residency, and domicile. These terms sound similar, and people often use them interchangeably in casual conversation, but in tax law they mean very different things. For globally mobile individuals, understanding the difference matters. You can be a U.S. citizen, a tax resident of another country, and still have your long-term home base tied to a different jurisdiction altogether. Each label can trigger different tax consequences, different filing obligations, and different planning opportunities.

We all know how messy tax returns can get when couples who used to file jointly divorce and there are children (and tax credits) involved. It’s often difficult to explain the rules surrounding Head of Household filing status and the various tax credits available to parent-clients who have separated or divorced. But what happens when the clients misunderstand and decide to fight about it in family or divorce court? The following case study says “nothing good” can be a horrifying and frustrating answer to this question.

Remember the dreaded student loan “tax bomb?” For the past few years, it's been easy to forget about it. Thanks to a temporary federal tax exclusion enacted during the pandemic, borrowers who received student loan forgiveness between 2021 and 2025 generally didn't have to include that forgiven debt in their taxable income — leaving many borrowers (and their advisors) to wonder if the tax bomb would eventually disappear for good. Unfortunately, Congress allowed the temporary exclusion to expire. Beginning in 2026, forgiven student loan balances may once again be treated as taxable income. While that sounds like a major change, the reality is that most borrowers didn’t benefit from these tax-free years in the first place. For most borrowers, forgiveness is still years away, and there’s no crystal ball for what future federal policymakers may do. In the meantime, advisors may need to revisit planning conversations that many assumed were behind them. And depending on where a borrower lives, their federal tax bill may be only part of the story.

A lot of client meetings still start with the same assumptions: W-2 in a U.S. state, mortgage nearby, a 401(k), maybe some RSUs, and a college-savings plan. Yet many of those “simple” clients now own an apartment in another country, freelance for a foreign company, or have parents wiring money from overseas. The tax code does not see those details as background color; it treats them as organizing facts. This is where citizenship, residency, and domicile quietly step onto center stage. For planners, the challenge is not memorizing every cross-border rule. It is knowing when a client is no longer “just domestic” and shifting your planning framework before you stumble into penalties, double taxation, or blown opportunities.

Consider this article your periodic reminder that, for married taxpayers, filing jointly is an election and not the default (and certainly not the only) filing status option. It is important in a busy practice to remember to offer this option to clients who may benefit from filing separately, even if they don't ask.

Income shifting strategies address taxation at its most fundamental level by directing income to taxpayers in lower brackets or with offsetting deductions. Unlike many tax strategies that merely time recognition or enhance deductions, effective income shifting can permanently reduce the tax burden on a given dollar of income—often creating tax savings that compound year after year. In this article, we'll explore systematic approaches to income shifting that create extraordinary value for clients while maintaining impeccable compliance.

The credit for dependent-care expenses (such as daycare costs) has long been stuck at 20% for "average" taxpayers. It finally gets a permanent boost in 2026 (for returns filed in 2027). Also, the amount of money a taxpayer can put into a dependent care assistance program is increasing by $2,500 for 2026. This change presents a chance for taxpayers and tax pros to reevaluate which is better – claiming the credit or using a flex plan.

In recognition of the 250th anniversary of the adoption of the Declaration of Independence on July 4, 1776, let’s review 250 years of tax history. Our nation’s tax systems have evolved over two and a half centuries as ways of doing business and living have changed. Also, expectations of services the public wants and needs from the government have grown, resulting in tax changes to generate increasing amounts of tax revenue. Along the way, lawmakers have considered principles of simplification, equity, fairness, economic growth and effective tax administration that have shaped our tax laws. This article offers questions and answers to cover a range of interesting aspects of our federal tax history.