What’s new in 2026?
Plenty! We’ll start with a couple of changes that were created in recent tax legislation. As always our tax advisors are ready to help you make the best of these provisions.
New tax provisions starting in 2026
As has been the case for many years, beginning with the year they turn 50, retirement savers can make “catch-up contributions” to retirement accounts, IRAs, and Roth IRAs in addition to the amounts workers of all ages can contribute from their wages. For 2026, a 50+ worker can contribute up to an additional $8,000 to their 401(k), 403(b), or governmental 457(b) plan. Workers who turn 60, 61,62, or 63 in 2026, get an enhanced catch-up of up to $11,250.
Catch-up contributions are subject to a new provision starting in 2026, which will affect anyone making catch-up contributions to their 401(k) in 2026 and whose 2025 wages were $150,000 or more from the employer sponsoring the plan. Such workers must make those catch-up contributions to a Roth account within the plan. Most plans offer Roth accounts but if the plan does not offer a Roth account, no catch-up contribution can be made by these higher earners.
Those subject to this new rule will not get a deduction for their catch-up contribution. Such workers should consider adjusting their paycheck withholdings due to this change to avoid paying more when they file their 2026 return.
While most people making more than $150,000 would prefer getting a deduction for their catch-up contributions, there may be some consolation for those who have a Roth account in their plan. Many higher income workers are not eligible to put funds in a Roth IRA due to income limitations. This new provision will at least allow them to fund a Roth account in their plan.
Another new provision affects the estimated 90% of households that do not spend enough on specific things to “itemize deductions” and therefore use the standard deduction when calculating their taxes. Because of how itemized deductions are calculated, many taxpayers who make charitable contributions and use the standard deduction do not get a tax benefit from making their donations.
Starting in 2026, a new charitable deduction will be available to non-itemizers for gifts of cash. “Cash” is literally cash as well as checks, electronic transfers, and credit card payments. The deduction is limited to a cumulative total of $1,000 per person, $2,000 per couple, over the course of the year. Income level is NOT a factor.
If you have been using the standard deduction and gotten out of the habit of keeping receipts and acknowledgements from charities, beginning January 1, 2026, start keeping them.
For those who do itemize, 2026 introduces a new limitation on charitable donations. Start by calculating ½ of 1% of your Adjusted Gross Income (AGI). That is the amount of charitable donations that will be disallowed. So, if your AGI is $200,000 and you donate $10,000, only $9,000 will be allowed to be entered on Schedule A as an itemized deduction.
Itemizers in the highest federal tax bracket of 37% will also see a new provision kick in that reduces the tax benefit of itemizing. Many households in this bracket will see income offset at 35% rather than the expected 37%.
Annual adjustments to existing tax items for 2026
Every year, several important numbers related to taxes are indexed for inflation. These include the marginal tax brackets, standard deductions, income limits to be eligible for various tax breaks and limits to contribution levels for various accounts.
Important numbers and dates for 2026
Marginal tax brackets for tax year 2026
Married filing jointly
| Taxable income | Tax rate |
| $0 to $24,800 | 10% of taxable income |
| $24,801 to $100,800 | $2,480 Plus 12% of the amount over $24,800 |
| $100,801 to $211,400 | $11,600 Plus 22% of the amount over $100,800 |
| $211,401 to $403,550 | $35,932 Plus 24% of the amount over $211,400 |
| $403,551 to $512,450 | $82,048 Plus 32% of the amount over $403,550 |
| $512,451 to $768,700 | $116,896 Plus 35% of the amount over $512,450 |
| $768,701 or more | $206,583.50 Plus 37% of the amount over $768,700 |
Source: IRS
Single filers
| Taxable income | Tax rate |
| $0 to $12,400 | 10% of taxable |
| $12,401 to $50,400 | $1,240 Plus 12% of amount over $12,400 |
| $50,401 to $105,700 | $5,800 Plus 22% of amount over $50,400 |
| $105,701 to $201,775 | $17,966 Plus 24% of amount over $105,700 |
| $201,776 to $256,225 | $41,024 Plus 32% of amount over $201,775 |
| $256,226 to $640,600 | $58,448 Plus 35% of amount over $256,225 |
| $640,601 or more | $192,979.25 Plus 37% of amount over $640,600 |
Source: IRS
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan, is increased to $24,500, up from $23,500. The catch-up contribution limit for employees aged 50 and over in the plans is increased by $500 to $8,000 for 2026. Catch-up contributions for employees 60-63 in 2026 remains $11,250 if the plan documents have been amended to allow for this special larger contribution.
The limit on annual contributions to an IRA for 2026 is now $7,500. In addition, the IRA catch-up contribution limit for individuals aged 50 and over is now indexed to inflation and will increase to $1,100 for 2026.
For 2026, the limit on Qualified Charitable Distributions from IRAs increased to $111,000, up from $108,000. The annual gift tax exclusion remains $19,000, but the Lifetime exemption from Gift and Estate Taxes is $15,000,000.
For Health Savings Accounts (HSA), the 2026 contribution limits are $4,400 (self-only) and $8,750 (family). People aged 55 or older in 2026 can add an additional $1,000 each making $10,750 the maximum for a married couple both 55 or older if all other requirements are met.
For more detailed information, see Rev. Proc. 2025-32 for most inflation adjustment amounts, Notice 2025-67 for amounts relating to retirement accounts, and Rev. Proc 2025-19 for amounts relating to HSAs.
The phase out ranges for the new “Senior deduction” available through tax ear 2028 of $6,000 per person age 65 or older are $75,000 – $175,000 (single) and $150,000 – $250,000 (MFJ). Households below these ranges get the full $6,000. As income enters the phase out range, the $6,000 is reduced and is eliminated when the upper end of the range is reached.
New “Trump accounts” available in 2026 (probably)
The One Big Beautiful Bill Act signed into law in July 2025, creates an entirely new type of account. “Trump Accounts” are a new early-start, IRA-like savings plan for children, to which parents, guardians and employers may contribute up to a cumulative $5,000 each year. Notably, unlike IRA accounts, there is no need for the child to have any employment income and there are no income limits for contributors.
The accounts have received some publicity recently. First, when the OBBBA passed, it included a stipulation that every child born between 2025 and 2028 will automatically receive a $1,000 federal seed contribution. In addition, just after Thanksgiving, Michael Dell, founder of Dell computers, and his wife Susan pledged $6.25 billion to contribute $250 deposits into 25 million new Trump accounts for children ages 10 and younger.
Further, on December 2nd the IRS issued its first bit of guidance on the accounts. The agency also opened a public comment period that runs through February 20, 2026 to aid in developing additional guidance. Financial institutions must meet certain criteria to offer the accounts and none of the institutions have processes to accommodate the accounts as yet. At this point, it is believed contributions will be permitted starting July 4, 2026.
… these new accounts may provide some opportunities for families looking to give their kids a strong financial foundation when they reach age 18.
With tax-free growth and tax-free withdrawals for education, buying a first home or starting a business, these new accounts may provide some opportunities for families looking to give their kids a strong financial foundation when they reach age 18. We’ll expect to have more later in the year when additional guidance is issued.
Changes to client portals
As we’ve mentioned in recent newsletters, changes are coming to your client portal. On December 31, 2025, our software provider, Tamarac, will officially transition to a new client portal featuring an updated look and improved functionality. Prior to the transition, you’ll receive an email from our office with a link to a short video highlighting what’s new.
A quick reminder: In November, Tamarac enhanced security by requiring Multi-Factor Authentication (MFA) for all client portals. When logging in, you’ll now verify your identity using a code sent to your cell phone or email address. The previous option to use security questions has been removed to better protect your information.
Thank you for your attention to these updates. If you have any questions or need assistance, please reach out to our office.