One of my obsessions is about what we can do for somebody who has high earnings and not much else. When I review multiple collections of year-end tax tips, there is not much for HENRY (high earnings not rich yet) other than a couple of Captain Obvious things like maximizing 401(k) contributions. Henry doesn’t have losses to harvest and is not about to set up a private foundation or a donor advised fund. Charity begins at home. So I got excited when I saw ads about cash balance plans. Was this the great white whale that I have been seeking that is a good answer for Henry? Or is it some sort of scam? As we will see it turns out to be neither, but it is probably something you should consider for some high earners.
2026 Changes to Form 2441 and Dependent Care Benefits
Jason Dinesen, CPA
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.
