Monthly Snapshot · July 14, 2026
Data as of market close July 14, 2026 (post-CPI) · CD-verified · dual-sourced per row · Snapshot LOCKED after publish.
| # | Data Point | Value | Source |
|---|
| 1 | Fed Funds Rate (target range) | 3.50%–3.75% (held since Dec 2025) | federalreserve.gov |
| 2 | 10-Year U.S. Treasury yield | 4.583% (Jul 14 close) | CNBC · FRED DGS10 |
| 3 | CPI Headline (YoY · June print) | 3.5% (down from May’s 4.2%) | bls.gov · CNBC |
| 4 | Core CPI (YoY · ex food and energy) | 2.6% (down from May’s 2.9%) | bls.gov |
| 5 | CPI Headline (MoM · seasonally adjusted) | −0.4% (largest MoM decline in over 5 years) | bls.gov |
| 6 | S&P 500 close (Jul 14, 2026) | 7,515.47 (down 0.8%) | Yahoo Finance |
| 7 | 2026 federal 24% bracket cap (MFJ) | $403,550 taxable income | IRS Rev. Proc. 2025-32 |
| 8 | 2026 federal 32% bracket cap (Single) | $256,225 taxable income | IRS Rev. Proc. 2025-32 |
| 9 | 2026 IRMAA first threshold | $109,000 single / $218,000 MFJ | CMS · Kiplinger |
| 10 | 2026 NIIT threshold (MAGI · 3.8%) | $200,000 single / $250,000 MFJ | IRC §1411 · IRS Topic 559 |
| 11 | 2026 0% LTCG ceiling | $49,450 single / $98,900 MFJ | IRS Rev. Proc. 2025-32 |
The Mid-Year Tax Strategy Backdrop
June’s Consumer Price Index came in at 3.5% year-over-year headline and 2.6% core. That’s a 70-basis-point drop in headline from May. Meanwhile, core dropped 30 basis points. In fact, energy prices fell 0.4% month-over-month — the largest monthly decline in over five years. As a result, Treasury yields fell. The 10-year closed Jul 14 at 4.583%.
However, market pricing points to a Fed hold at 3.50%–3.75% at the Jul 28–29 meeting. Market probability of no change sits at 63.5%. For $1M–$3M households running the mid-year tax strategy audit, that backdrop shifts three coordination inputs at once. Meanwhile, it leaves the fifth cliff most audits miss untouched.
The Current Environment for Mid-Year Tax Strategy
Four structural features of the July environment matter for the Bracket-Window Audit before September.
First — softer inflation gives the marginal bracket some room
The IRS set the 2026 federal bracket schedule in October 2025. It’s fixed for this tax year. So nothing in the June CPI print changes the 24% MFJ ceiling ($403,550) or the 32% single ceiling ($256,225). However, the softer print does change confidence in the run-rate. In fact, a 3.5% headline read means Q2 income projections carry less inflation-adjustment noise. As a result, households running the mid-year tax strategy audit in July typically end September with a more accurate model than households who waited.
Second — the 10-year yield drop matters more for the asset side than for sizing
The 10-year closed Jul 14 at 4.583%. That’s down from where it sat in mid-June. In turn, the shift reprices fixed-income allocations at the margin. For example, households holding new Treasury purchases or laddered CDs may see slightly different reinvestment yields. However, it does not change the arithmetic underneath a Roth conversion. In fact, the conversion decision is driven by bracket capacity, IRMAA tier exposure, RMD onset window, and the NIIT threshold — not by the 10-year print on the conversion day.
Third — the Net Investment Income Tax is the fifth cliff most audits miss
The 3.8% Net Investment Income Tax (NIIT) applies once modified adjusted gross income crosses $200,000 for single filers or $250,000 for married couples filing jointly. Those thresholds are unchanged from 2025 to 2026. In fact, Congress has not indexed them for inflation since 2013.
Here’s the subtlety. A Roth conversion is not itself taxable investment income for NIIT purposes. However, the conversion raises MAGI. As a result, that higher MAGI can drag other investment income — dividends, taxable interest, realized capital gains — into the 3.8% surtax. For example, consider a household with $180,000 MAGI and $60,000 of net investment income. A $100,000 Roth conversion pushes MAGI to $280,000. Then the NIIT applies 3.8% to the lesser of net investment income ($60,000) or the amount MAGI exceeds the threshold ($30,000). So the tax hits $1,140. That’s a cost the household didn’t model when they sized the conversion against bracket capacity alone.
Fourth — the Jul 28–29 FOMC decision is a checkpoint, not a sizing input
Markets are pricing a 63.5% probability of no change to the federal funds target at the Jul 28–29 meeting. Whether the Fed holds or moves, the mid-year Roth conversion decision does not hinge on that print. However, the meeting does provide a clear checkpoint. In short, households that lock the July audit output before the meeting have a plan that is durable to whatever the FOMC decides.
“Tax decisions don’t fail from prediction. They fail from coordination across years.”
What the Mid-Year Tax Strategy Audit Looks Like This Month
July is the audit month. The June CPI print is on the tape. Q2 income is visible. So the household still has ten weeks before September to size the five cliffs against each other. In short, the mid-month macro layer is set.
The remaining work is household-specific: pull the run-rate, model bracket capacity, check IRMAA tier exposure at the two-year forward date, size the conversion against remaining capacity, subtract the NIIT drag if applicable, and confirm any 0% LTCG room the household intended to use is preserved. As a result, households that finish the audit before the Fed’s Jul 28–29 decision keep the option of executing a Q3 conversion. Households that wait past it have less flexibility across Q3.
The Coordination Sequence — Five Steps, Year by Year
Five-step sequence — verbatim across the July Mid-Year Tax Strategy pillar (D1, D2, D3, D4, D5).
- Lock the IRMAA ceiling first. The 2-year MAGI lookback drives 2028 Medicare premiums. Confirm the ceiling before sizing anything else.
- Reserve 0% LTCG room next. Appreciated taxable assets often benefit more from realization at zero tax than the same income does inside a Roth.
- Size the Roth conversion against remaining bracket capacity. Whatever space is left after IRMAA and LTCG is the conversion capacity for this year.
- Subtract the NIIT drag. If the conversion pushes MAGI past $200,000 single or $250,000 MFJ, model the 3.8% NIIT on the lesser of NII or the MAGI-over-threshold amount.
- Confirm RMD timing and re-audit annually. If RMDs begin within three years, the conversion sizes larger this year — even accepting IRMAA cost — because next year’s bracket space compresses.
“Tax decisions don’t fail from prediction. They fail from coordination across years.”
What is the mid-year tax strategy audit?
The mid-year tax strategy audit is a July-timed review that sizes Roth conversions, capital gains realizations, and other MAGI-generating events against five cliffs at once — bracket capacity, IRMAA thresholds, RMD onset window, 0% long-term capital gains ceiling, and the Net Investment Income Tax threshold. Q2 income visibility and a September execution deadline make July the natural window for the audit.
Mid-Year Tax Strategy FAQ
Does the June CPI print change the 2026 tax brackets themselves?
No. The IRS set the 2026 federal income tax brackets in Revenue Procedure 2025-32 in October 2025. Those brackets are fixed for the tax year. CPI prints during 2026 inform the 2027 inflation adjustment, not this year’s ceilings.
If the Fed holds at Jul 28–29, does that affect Roth conversion sizing?
Not directly. Roth conversion sizing is driven by the household’s marginal bracket, IRMAA tier, NIIT threshold, and 0% LTCG room. Federal funds rate levels affect fixed-income yields on the asset side. However, they do not change the tax coordination underneath a conversion.
How does the NIIT interact with a Roth conversion?
The conversion income itself is not subject to the 3.8% NIIT. However, the conversion raises MAGI. As a result, that higher MAGI can pull other investment income into the surtax on the lesser of NII or the amount MAGI exceeds $200,000 single or $250,000 MFJ.
Should the household wait for the Jul 28–29 FOMC decision before finishing the audit?
No. The audit output is the plan. Execution can wait, but the plan should be locked before the Fed meets. So the household preserves the option of executing a Q3 conversion in August or September.
Continue with the July Mid-Year Tax Strategy Pillar
Next month — August 2026 — the pillar moves to healthcare cost coordination: Medicare enrollment, IRMAA planning (informed by this month’s audit), supplemental coverage gaps, and long-term care exposure.
Schedule with Security Financial Management
A 15-minute call confirms whether the mid-year tax strategy audit needs all five decisions or a refresh of two. Coordinating these five before September materially shapes the year’s tax coordination.
Schedule a 15-minute call →
About the Author
Frank Lovaglio, RFC® · Managing Partner, Security Financial Management. CRD #1299700. Frank has guided multigenerational families through coordinated retirement and estate planning since 1989. Verify credentials at BrokerCheck by FINRA or SEC IAPD.
Third-Party Recognitions
AdvisorHub 2025 Advisors to Watch, Over $1B: A recognition based on AdvisorHub’s proprietary criteria published in 2025. SFM did not pay cash or non-cash compensation for consideration in this rating. Third-party recognitions are not indicative of any client’s experience and do not guarantee future performance.
Dave Ramsey SmartVestor Pro: SmartVestor Pros pay a fee to participate in the Ramsey Solutions referral program. Being listed as a SmartVestor Pro is not an endorsement of SFM or Frank Lovaglio by Dave Ramsey or Ramsey Solutions, and does not represent client outcomes.
Disclosures
The information presented is for educational purposes only and does not constitute legal, tax, or investment advice. Security Financial Management, Inc. is a registered investment advisor under Kestra Advisory Services, LLC. Tax planning strategies should be coordinated with qualified tax professionals familiar with your specific situation. Past performance is not indicative of future results.
Securities offered through Kestra Investment Services, LLC, member FINRA/SIPC (Kestra IS). Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS). Security Financial Management, Bluespring Wealth Partners, LLC, Kestra IS and Kestra AS are affiliated through common ownership by Kestra Holdings.
Verify advisor credentials at BrokerCheck by FINRA or SEC Investment Adviser Public Disclosure.
Mid-Year Tax Strategy: June CPI Cooldown and Roth Conversion Sizing · SFM
By Frank Lovaglio, RFC® · Managing Partner, Security Financial Management · CRD #1299700
Securities offered through Kestra Investment Services, LLC, member FINRA/SIPC (Kestra IS). Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS). Security Financial Management, Bluespring Wealth Partners, LLC, Kestra IS and Kestra AS are affiliated through common ownership by Kestra Holdings.Reviewed by Dave Allen, CFP® · CRD #1210763 · July 15, 2026 · Last reviewed July 15, 2026
Mid-Year Tax Strategy: What June’s Cool CPI Print Means for Roth Conversion Sizing
Monthly Snapshot · July 14, 2026
Data as of market close July 14, 2026 (post-CPI) · CD-verified · dual-sourced per row · Snapshot LOCKED after publish.
The Mid-Year Tax Strategy Backdrop
June’s Consumer Price Index came in at 3.5% year-over-year headline and 2.6% core. That’s a 70-basis-point drop in headline from May. Meanwhile, core dropped 30 basis points. In fact, energy prices fell 0.4% month-over-month — the largest monthly decline in over five years. As a result, Treasury yields fell. The 10-year closed Jul 14 at 4.583%.
However, market pricing points to a Fed hold at 3.50%–3.75% at the Jul 28–29 meeting. Market probability of no change sits at 63.5%. For $1M–$3M households running the mid-year tax strategy audit, that backdrop shifts three coordination inputs at once. Meanwhile, it leaves the fifth cliff most audits miss untouched.
The Current Environment for Mid-Year Tax Strategy
Four structural features of the July environment matter for the Bracket-Window Audit before September.
First — softer inflation gives the marginal bracket some room
The IRS set the 2026 federal bracket schedule in October 2025. It’s fixed for this tax year. So nothing in the June CPI print changes the 24% MFJ ceiling ($403,550) or the 32% single ceiling ($256,225). However, the softer print does change confidence in the run-rate. In fact, a 3.5% headline read means Q2 income projections carry less inflation-adjustment noise. As a result, households running the mid-year tax strategy audit in July typically end September with a more accurate model than households who waited.
Second — the 10-year yield drop matters more for the asset side than for sizing
The 10-year closed Jul 14 at 4.583%. That’s down from where it sat in mid-June. In turn, the shift reprices fixed-income allocations at the margin. For example, households holding new Treasury purchases or laddered CDs may see slightly different reinvestment yields. However, it does not change the arithmetic underneath a Roth conversion. In fact, the conversion decision is driven by bracket capacity, IRMAA tier exposure, RMD onset window, and the NIIT threshold — not by the 10-year print on the conversion day.
Third — the Net Investment Income Tax is the fifth cliff most audits miss
The 3.8% Net Investment Income Tax (NIIT) applies once modified adjusted gross income crosses $200,000 for single filers or $250,000 for married couples filing jointly. Those thresholds are unchanged from 2025 to 2026. In fact, Congress has not indexed them for inflation since 2013.
Here’s the subtlety. A Roth conversion is not itself taxable investment income for NIIT purposes. However, the conversion raises MAGI. As a result, that higher MAGI can drag other investment income — dividends, taxable interest, realized capital gains — into the 3.8% surtax. For example, consider a household with $180,000 MAGI and $60,000 of net investment income. A $100,000 Roth conversion pushes MAGI to $280,000. Then the NIIT applies 3.8% to the lesser of net investment income ($60,000) or the amount MAGI exceeds the threshold ($30,000). So the tax hits $1,140. That’s a cost the household didn’t model when they sized the conversion against bracket capacity alone.
Fourth — the Jul 28–29 FOMC decision is a checkpoint, not a sizing input
Markets are pricing a 63.5% probability of no change to the federal funds target at the Jul 28–29 meeting. Whether the Fed holds or moves, the mid-year Roth conversion decision does not hinge on that print. However, the meeting does provide a clear checkpoint. In short, households that lock the July audit output before the meeting have a plan that is durable to whatever the FOMC decides.
What the Mid-Year Tax Strategy Audit Looks Like This Month
July is the audit month. The June CPI print is on the tape. Q2 income is visible. So the household still has ten weeks before September to size the five cliffs against each other. In short, the mid-month macro layer is set.
The remaining work is household-specific: pull the run-rate, model bracket capacity, check IRMAA tier exposure at the two-year forward date, size the conversion against remaining capacity, subtract the NIIT drag if applicable, and confirm any 0% LTCG room the household intended to use is preserved. As a result, households that finish the audit before the Fed’s Jul 28–29 decision keep the option of executing a Q3 conversion. Households that wait past it have less flexibility across Q3.
The Coordination Sequence — Five Steps, Year by Year
Five-step sequence — verbatim across the July Mid-Year Tax Strategy pillar (D1, D2, D3, D4, D5).
What is the mid-year tax strategy audit?
The mid-year tax strategy audit is a July-timed review that sizes Roth conversions, capital gains realizations, and other MAGI-generating events against five cliffs at once — bracket capacity, IRMAA thresholds, RMD onset window, 0% long-term capital gains ceiling, and the Net Investment Income Tax threshold. Q2 income visibility and a September execution deadline make July the natural window for the audit.
Mid-Year Tax Strategy FAQ
No. The IRS set the 2026 federal income tax brackets in Revenue Procedure 2025-32 in October 2025. Those brackets are fixed for the tax year. CPI prints during 2026 inform the 2027 inflation adjustment, not this year’s ceilings.
Not directly. Roth conversion sizing is driven by the household’s marginal bracket, IRMAA tier, NIIT threshold, and 0% LTCG room. Federal funds rate levels affect fixed-income yields on the asset side. However, they do not change the tax coordination underneath a conversion.
The conversion income itself is not subject to the 3.8% NIIT. However, the conversion raises MAGI. As a result, that higher MAGI can pull other investment income into the surtax on the lesser of NII or the amount MAGI exceeds $200,000 single or $250,000 MFJ.
No. The audit output is the plan. Execution can wait, but the plan should be locked before the Fed meets. So the household preserves the option of executing a Q3 conversion in August or September.
Continue with the July Mid-Year Tax Strategy Pillar
Next month — August 2026 — the pillar moves to healthcare cost coordination: Medicare enrollment, IRMAA planning (informed by this month’s audit), supplemental coverage gaps, and long-term care exposure.
Schedule with Security Financial Management
A 15-minute call confirms whether the mid-year tax strategy audit needs all five decisions or a refresh of two. Coordinating these five before September materially shapes the year’s tax coordination.
Schedule a 15-minute call →
About the Author
Frank Lovaglio, RFC® · Managing Partner, Security Financial Management. CRD #1299700. Frank has guided multigenerational families through coordinated retirement and estate planning since 1989. Verify credentials at BrokerCheck by FINRA or SEC IAPD.
Third-Party Recognitions
AdvisorHub 2025 Advisors to Watch, Over $1B: A recognition based on AdvisorHub’s proprietary criteria published in 2025. SFM did not pay cash or non-cash compensation for consideration in this rating. Third-party recognitions are not indicative of any client’s experience and do not guarantee future performance.
Dave Ramsey SmartVestor Pro: SmartVestor Pros pay a fee to participate in the Ramsey Solutions referral program. Being listed as a SmartVestor Pro is not an endorsement of SFM or Frank Lovaglio by Dave Ramsey or Ramsey Solutions, and does not represent client outcomes.
Disclosures
The information presented is for educational purposes only and does not constitute legal, tax, or investment advice. Security Financial Management, Inc. is a registered investment advisor under Kestra Advisory Services, LLC. Tax planning strategies should be coordinated with qualified tax professionals familiar with your specific situation. Past performance is not indicative of future results.
Securities offered through Kestra Investment Services, LLC, member FINRA/SIPC (Kestra IS). Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS). Security Financial Management, Bluespring Wealth Partners, LLC, Kestra IS and Kestra AS are affiliated through common ownership by Kestra Holdings.
Verify advisor credentials at BrokerCheck by FINRA or SEC Investment Adviser Public Disclosure.