So Money with Farnoosh Torabi – Episode 1947: Ask Farnoosh: Tax Season Moves, Optimal Rainy Day Funds, Traditional or Roth IRA?

Date: February 20, 2026
Host: Farnoosh Torabi

Overview

This episode of So Money features Farnoosh Torabi’s Friday "Ask Farnoosh" session, where she addresses pressing listener money questions around tax season strategies, emergency fund sizing, choosing between Traditional and Roth IRA, and investing for children’s future. The episode is informative, candid, and blends personal anecdotes, practical insights, and recent news, including an impactful segment about being on the Today Show and broader financial updates relevant to 2026.

Key Themes and Discussion Points

1. Building a Profitable Podcast: Announcement & Motivation

• Farnoosh shares her excitement about launching a small mentorship program, Build a Profitable Podcast, designed for podcasters at all levels.
  • The cohort is intentionally limited in size for tailored support.
  • Focus is on ROI and growth strategies, based on her decade-plus podcasting experience.
• Quote:
  "If you've been waiting for a sign to take your show more seriously this year, this might be it." – Farnoosh (06:30)
• Personal reflection on how podcasting, treated as a business, transformed her career.
• The importance of community and mentorship to overcome the isolation of solo podcasting.

2. Financial Reset for Tax Season

• Farnoosh discusses her recent Today Show appearance (aired earlier that morning) about making the most of tax season:
  • Use tax season as a time for a financial reset, not just an obligation.
  • Don’t leave tax savings on the table; important reminders about IRA contribution deadlines.
    • You can contribute to a Traditional IRA for the previous tax year up until April 15.
• New deductions and credits for 2026:
  • Child Tax Credit increased to $2,200 per qualifying child (now indexed for inflation).
  • New overtime pay deduction: Up to $12,500 for single filers, $25,000 for joint filers.
  • Senior deduction: Up to $6,000 for individuals, $12,000 for couples, in addition to age-based standard deduction.
• Quote:
  "One of the biggest mistakes I see people make is leaving tax savings on the table simply because they weren’t aware of some of the rules." – Farnoosh (11:57)
• Free IRS filing options for AGI below $89,000; recommendation to use CPAs for complex returns.

3. Proactive Steps for Next Year’s Taxes

• Adjust withholding now to avoid surprise bills or oversized refunds in the future.
• Track deductions throughout the year; Farnoosh suggests digital receipts and a simple log for donations/business expenses.
• Use tax season stress as guidance for financial pain points that need addressing.

4. Headline: Supreme Court Strikes Down Trump Tariffs

• Farnoosh quickly recaps the major news: Supreme Court struck down tariffs imposed during the Trump administration, requiring congressional approval for such measures.
• Notes the cautious reaction from markets and potential positive impact for small businesses, especially those hit hardest by supply chain volatility and squeezed margins.
• Quote:
  "Ask any small business owner and they'll tell you finances get messy fast." – Farnoosh (16:00)

5. Listener Questions: Rainy Day Funds, Retirement, & Kids' Wealth

a. Setting Up Kids for Financial Success (Beyond 529 Plans) (18:00)

• Addressing: “What can I do for my kids beyond 529 college savings?”
  • Farnoosh reassures: If you’re saving for college in a 529, you’re already doing something extraordinary.
  • Quotes and strategies from Lynette Khalfani-Cox (guest on previous episode):
    • Wealth starter kit: Help with tuition, a first home down payment, and a car.
    • Quote:
      "We told our kids, we'll buy you your first house, we'll put you through college debt-free, and then we'll buy you a car, as my husband likes to say, because then drive away now." – Lynette Khalfani-Cox (20:24)
    • Encourage seeking—instead of any college—those where in-state tuition is quickly attainable to save significant money.
  • For families unable to provide financially:
    • Focus on building resilience, work ethic, and fostering open money conversations early on.
    • Quote:
      "Resilience, work ethic and having honest conversations about money. These are the things we can start to implement early on in their lives." – Farnoosh (22:45)

b. Emergency Accounts: How Much Is Enough? (24:00)

• Basic rule: 4-6 months of expenses in accessible savings.
• Adds nuance: Job searches are longer in some industries; consider severance packages, unemployment benefits, ability to cut costs, and employment context.
• Entrepreneurs: Aim for up to a year’s worth of operating expenses/cash flow due to income variability.
• Quote:
  "It's not just an arbitrary number... In some industries, job searches are averaging six months or longer, so keep that in mind." – Farnoosh (25:15)

c. Making the Most of Retirement Contributions: 401(k) vs. IRA (26:30)

• Question: After maxing a 401(k), should you open a Traditional or Roth IRA?
  • 401(k): Tax benefit now; withdrawals taxed in retirement.
  • Roth IRA: No tax benefit now, but tax-free qualified withdrawals in retirement.
  • Recommends Roth IRA if eligible, for tax diversity and flexibility in retirement planning.
• Income phase-out for Roth IRA (2026 figures):
  • Eligibility for contributions begins to phase out at $168,000 (single) and $242,000 (married filing jointly).
• Quote:
  "It's very important to have tax diversity in retirement when it comes to these savings vehicles." – Farnoosh (27:30)

d. New Senior Deduction Clarified (28:30)

• Clarifies: Only spouses 65+ each qualify for full joint senior deduction ($12,000 for a couple); otherwise, only $6,000 if just one spouse meets age requirement.

Notable Quotes & Timestamps

| Timestamp | Speaker | Quote | |-----------|------------|-------| | 06:30 | Farnoosh | “If you've been waiting for a sign to take your show more seriously this year, this might be it.” | | 11:57 | Farnoosh | “One of the biggest mistakes I see people make is leaving tax savings on the table simply because they weren’t aware of some of the rules.” | | 16:00 | Farnoosh | “Ask any small business owner and they'll tell you finances get messy fast.” | | 20:24 | Lynette Khalfani-Cox | “We told our kids, we'll buy you your first house, we'll put you through college debt free, and then we'll buy you a car... We don't want you living in our basement.” | | 22:45 | Farnoosh | “Resilience, work ethic and having honest conversations about money. These are the things we can start to implement early on in their lives.” | | 25:15 | Farnoosh | “It's not just an arbitrary number... In some industries, job searches are averaging six months or longer, so keep that in mind.” | | 27:30 | Farnoosh | “It's very important to have tax diversity in retirement when it comes to these savings vehicles.” |

Segment Timestamps

• Podcast Mentorship Program: 02:00–07:00
• Tax Season Strategies & Today Show Recap: 07:30–17:00
• Headline — Supreme Court & Tariffs: 17:00–18:00
• Listener Q&A:
  • Kids' Financial Success Beyond 529: 18:00–24:00
  • Emergency Fund Guidance: 24:00–26:30
  • 401k vs Roth IRA/Retirement Contributions: 26:30–28:30
  • Senior Deduction Clarification: 28:30–29:00

Tone & Style

• Friendly, encouraging, and direct
• Mixes expert advice with personal stories and candid commentary
• Maintains an inclusive, practical lens on all recommendations

Final Thoughts

This episode is a valuable primer for both tax-season moves and bigger-picture financial planning. Farnoosh leverages timely news, provides specific action steps, and highlights the importance of holistic, thoughtful financial choices—whether you’re planning for yourself, your business, or your kids’ futures.