2026 Tax Changes: What's New and What It Means for You
Inflation adjustments, higher contribution limits and the first full year of the 2025 tax law's new rules. Here is every change that affects the 2026 return you'll file in 2027 — with each number checked against IRS sources.
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📐 Figures verified Sep 25, 2026 against IRS primary sources (Rev. Proc. 2025-32 and the other documents listed under Sources). How we check numbers →
For 2026 the standard deduction is $16,100 single and $32,200 married filing jointly, the 10% and 12% brackets widen about 4% (higher brackets about 2.3%), the SALT cap is $40,400, and 401(k) and IRA limits rise to $24,500 and $7,500. New this year: non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts to charity.
Overview: What Changed for 2026
Two forces shape the 2026 return. The first is the annual inflation adjustment: the IRS published the 2026 brackets, standard deduction and dozens of other amounts in Revenue Procedure 2025-32, and the retirement-plan limits in Notice 2025-67. The second is Public Law 119-21, the tax law signed on July 4, 2025. It made the 2017-era rates and the larger standard deduction permanent — so the "sunset" many households planned around never happened — and it added temporary deductions for 2025 through 2028, plus several rules that begin with the 2026 tax year.
The 2026 standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly and $24,150 for heads of household. And for the first time since 2021, people who take it can also deduct charity: up to $1,000 ($2,000 joint) of cash gifts to qualifying charities.
Numbers That Matter for 2026
| Figure (2026) | Amount | Source | Verified |
|---|---|---|---|
| Standard deduction (single / joint / head of household) | $16,100 / $32,200 / $24,150 | IRS Rev. Proc. 2025-32 | Sep 25, 2026 |
| 401(k) deferral limit (+ age-50 catch-up) | $24,500 (+$8,000) | IRS Notice 2025-67 | Sep 25, 2026 |
| IRA limit (+ age-50 catch-up) | $7,500 (+$1,100) | IRS IR-2025-111 | Sep 25, 2026 |
| HSA limit (self-only / family) | $4,400 / $8,750 | IRS Rev. Proc. 2025-19 | Sep 25, 2026 |
| SALT cap (phase-down starts at modified AGI of) | $40,400 ($505,000) | IRS Publication 505 (2026) | Sep 25, 2026 |
| Social Security wage base | $184,500 | SSA 2026 COLA Fact Sheet | Sep 25, 2026 |
| Standard mileage rate, business (Jan–Jun / from Jul 1) | 72.5¢ / 76¢ | IRS standard mileage rates | Sep 26, 2026 |
2025 vs. 2026 at a Glance
| Figure | 2025 | 2026 |
|---|---|---|
| Standard deduction (single / joint) | $15,750 / $31,500 | $16,100 / $32,200 |
| Standard deduction (head of household) | $23,625 | $24,150 |
| 401(k) / 403(b) / TSP deferral limit | $23,500 | $24,500 |
| 401(k) catch-up, age 50+ | $7,500 | $8,000 |
| IRA contribution limit | $7,000 | $7,500 |
| HSA limit (self-only / family) | $4,300 / $8,550 | $4,400 / $8,750 |
| SALT deduction cap | $40,000 | $40,400 |
| Top of the 0% capital-gains band (single / joint) | $48,350 / $96,700 | $49,450 / $98,900 |
| Social Security wage base | $176,100 | $184,500 |
| Estate and gift tax exclusion | $13.99 million | $15 million |
2026 Tax Brackets and Standard Deduction
The seven rates are unchanged; the income thresholds rose with inflation. These are the 2026 brackets for taxable income (after deductions), from Rev. Proc. 2025-32:
| Tax Rate | Single Filer | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 10% | Up to $12,400 | Up to $24,800 | Up to $17,700 |
| 12% | $12,401 – $50,400 | $24,801 – $100,800 | $17,701 – $67,450 |
| 22% | $50,401 – $105,700 | $100,801 – $211,400 | $67,451 – $105,700 |
| 24% | $105,701 – $201,775 | $211,401 – $403,550 | $105,701 – $201,750 |
| 32% | $201,776 – $256,225 | $403,551 – $512,450 | $201,751 – $256,200 |
| 35% | $256,226 – $640,600 | $512,451 – $768,700 | $256,201 – $640,600 |
| 37% | Over $640,600 | Over $768,700 | Over $640,600 |
Standard deduction 2026: $16,100 (single or married filing separately) | $32,200 (married filing jointly) | $24,150 (head of household). If you are 65 or older or blind, add $2,050 (unmarried) or $1,650 per condition (married).
Take a single filer with $60,000 of taxable income in 2026. The first $12,400 is taxed at 10%, the next $38,000 at 12%, and only the remaining $9,600 at 22%. Total federal income tax: $7,912 — an effective rate of about 13.2% on that taxable income, not 22%. A raise never lowers your take-home pay; only the dollars above a threshold pay the higher rate.
A married couple filing jointly, both under 65, earns $150,000 in wages in 2026. Each contributes $10,000 to a traditional 401(k), and together they give $3,000 in cash directly to charities.
- Adjusted gross income: $150,000 − $20,000 of 401(k) deferrals = $130,000.
- Deductions: the $32,200 standard deduction plus the new non-itemizer charitable deduction, capped at $2,000 for joint filers.
- Taxable income: $130,000 − $32,200 − $2,000 = $95,800 — still inside the 12% bracket, which runs to $100,800.
- Federal income tax: 10% of the first $24,800 ($2,480) + 12% of the next $71,000 ($8,520) = $11,000, about 7.3% of their wages.
Under 2025 rules the same household would have owed about $11,498, so they pay roughly $500 less for 2026. The wider brackets, the higher standard deduction and the new charity deduction each contribute; nothing about their behavior changed.
Deductions: SALT, Charity and the New Senior Deduction
SALT cap: the deduction for state and local income, sales and property taxes is capped at $40,400 for 2026 ($20,200 if married filing separately). The cap shrinks by 30% of modified AGI above $505,000, but never below $10,000; at $600,000 of MAGI it is $11,900. It rises 1% a year through 2029 and, under current law, returns to $10,000 in 2030. Our standard vs. itemized guide works through who should itemize again, and the tax strategy hub collects every DWS tax guide.
Charitable gifts: three rules start in 2026. Non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying charities; gifts to donor-advised funds don't count. Itemizers can deduct only the part of their giving above 0.5% of AGI. And for people in the 37% bracket, itemized deductions save at most 35 cents per dollar.
Senior deduction: for 2025 through 2028, each person age 65 or older can deduct $6,000 whether or not they itemize. It phases out above $75,000 of modified AGI ($150,000 joint).
Family and care benefits: the Child Tax Credit is $2,200 per child for 2026, with up to $1,700 refundable, and the dependent care FSA limit rises to $7,500 per household ($3,750 married filing separately), up from $5,000.
2026 Retirement Account Contribution Limits
| Account Type | 2026 Limit | Extra at Older Ages |
|---|---|---|
| 401(k) / 403(b) / governmental 457 / TSP | $24,500 | +$8,000 at 50+ (total $32,500); ages 60–63: +$11,250 instead (total $35,750) |
| SIMPLE IRA (most plans) | $17,000 | +$4,000 at 50+ (total $21,000); ages 60–63: +$5,250 instead (total $22,250) |
| Traditional / Roth IRA | $7,500 | +$1,100 at 50+ (total $8,600) |
| HSA (self-only) | $4,400 | +$1,000 at 55+ (total $5,400) |
| HSA (family) | $8,750 | +$1,000 at 55+ (total $9,750) |
| Total annual additions: SEP IRA, solo 401(k) and all defined-contribution plans | $72,000 | 401(k)-type catch-ups can be added on top |
Roth IRA eligibility phases out between $153,000 and $168,000 of modified AGI for single filers and between $242,000 and $252,000 for joint filers. The IRS has also announced the 2027 HSA limits already: $4,500 for self-only coverage and $9,000 for families.
Retirement Rules to Know for 2026
- Roth catch-ups for higher earners: starting in 2026, employees whose prior-year FICA wages from the employer exceeded the SECURE 2.0 threshold (set at $145,000 and indexed for inflation) must make any 401(k) catch-up contributions as Roth money.
- Super catch-up at 60–63: workers who turn 60, 61, 62 or 63 during the year can contribute the larger $11,250 catch-up instead of $8,000.
- Emergency withdrawals: up to $1,000 a year can come out of a retirement account for emergency expenses without the 10% early-withdrawal penalty.
- 529 to Roth rollovers: after 15 years, unused 529 money can move to the beneficiary's Roth IRA, up to $35,000 over a lifetime and within the annual IRA limit.
- RMD age: required minimum distributions start at age 73 (rising to 75 in 2033).
2026 Capital Gains Tax Rates
Long-term capital gains (assets held more than a year) and qualified dividends are taxed at 0%, 15% or 20%, depending on your taxable income. The 2026 thresholds:
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | Up to $49,450 | $49,451 – $545,500 | Over $545,500 |
| Married Filing Jointly | Up to $98,900 | $98,901 – $613,700 | Over $613,700 |
| Head of Household | Up to $66,200 | $66,201 – $579,600 | Over $579,600 |
High earners also owe the 3.8% net investment income tax on investment income above $200,000 of modified AGI ($250,000 joint). Those thresholds are set by statute and are not indexed for inflation.
In 2026, a married couple with taxable income up to $98,900 ($49,450 single) pays no federal tax on long-term gains that fit under that line. Early retirees and anyone with a low-income year can realize gains in that band and reset their cost basis tax-free — see our capital gains guide for how gains stack on top of other income.
The 2025 Law's Temporary Deductions (2025–2028)
Four new deductions run from 2025 through 2028. Each is available whether or not you itemize, and each phases out at higher incomes:
- No tax on tips: deduct up to $25,000 of qualified tips; the deduction phases out above $150,000 of modified AGI ($300,000 joint).
- No tax on overtime: deduct the premium part of qualified overtime pay, up to $12,500 ($25,000 joint), with the same $150,000 / $300,000 phase-out.
- Senior deduction: $6,000 for each person 65 or older, phasing out above $75,000 of modified AGI ($150,000 joint).
- Car-loan interest: deduct up to $10,000 a year of interest on a loan for a new personal vehicle whose final assembly was in the United States; it phases out above $100,000 of modified AGI ($200,000 joint).
One credit went the other way: the clean vehicle credits ended for vehicles acquired after September 30, 2025.
What to Do Before December 31, 2026
- Re-check your withholding. The new deductions can leave you over-withheld (tips, overtime, seniors) or under-withheld (a second job, a side business). The paycheck optimizer shows the effect of a W-4 change.
- Fill your workplace plan by December 31. 401(k) deferrals count only for the year they come out of your pay. IRA and HSA contributions for 2026 can wait until April 15, 2027.
- Plan your giving around the new floor. Standard-deduction filers should keep receipts for cash gifts up to $1,000 ($2,000 joint). Itemizers can "bunch" two years of gifts into one year to clear the 0.5% floor.
- Use the 0% gains band. If your 2026 taxable income will land under $49,450 ($98,900 joint), realizing some long-term gains can reset your cost basis tax-free.
- Watch the phase-out lines. The senior, tips and overtime deductions shrink as modified AGI rises; a Roth conversion or large capital gain can push you past $75,000 / $150,000 or $150,000 / $300,000.
Decision Rules and Common Mistakes
If this, then that
- If your itemized deductions fall short of $32,200 (joint) or $16,100 (single) → take the standard deduction and claim up to $2,000 / $1,000 of cash gifts on top.
- If your state and local taxes exceed $10,000 and your modified AGI is under $505,000 → re-run the itemizing math; the 2026 SALT cap counts up to $40,400.
- If you turn 60, 61, 62 or 63 in 2026 → your 401(k) catch-up is $11,250, not $8,000; update your payroll election.
- If your 2026 taxable income will stay at or below $98,900 (joint) or $49,450 (single) → consider realizing long-term gains inside the 0% band.
- If you earn tips or overtime, or you turn 65 → re-check your W-4; the new deductions can leave you over-withheld.
Mistakes to avoid
- Planning around a 2025 "sunset" — the lower rates and the larger standard deduction are permanent law.
- Counting donor-advised fund gifts toward the non-itemizer charity deduction; only cash given directly to qualifying charities counts.
- Leaving last year's 401(k), IRA or HSA limit on an automatic contribution — the 2026 limits are higher.
- Forgetting that the senior, tips and overtime deductions shrink as modified AGI rises — a Roth conversion or large gain can cost you part of them.