2026 New Year Tax Implications

The tax rates for long-term capital gains didn’t change, but the taxable income thresholds for each bracket increased.1

Standard Deduction Increases

The standard deduction will rise in 2026:1

• For single filers and married couples filing separately, the standard deduction increased to $16,100 (up from $15,000 in 2025).
• For married couples filing jointly, the standard deduction rose to $32,00 (up from $30,000 in 2025).
• For heads of household, the standard deduction increased to $24,150 (up from $22,500 in 2025).

In addition to the base standard deduction, taxpayers age 65 and older (or who are blind) qualify for an additional amount. For 2026, the additional standard deduction is:3

• Single filers and heads of household: $2,050 if age 65 or older or blind; $4,100 if age 65 or older and blind (up from $2,000 and $4,000, respectively, in 2025).
• Married filing jointly or separately (per qualifying spouse): $1,650 if age 65 or older or blind; $3,300 if age 65 or older and blind (up from $1,600 and $3,200, respectively, in 2025).

Alternative Minimum Tax (AMT) Exemption

The AMT ensures high-income taxpayers pay a minimum level of tax, even with significant deductions. The IRS exempts income up to a certain amount to prevent low- and middle-income taxpayers from being impacted by the AMT. For 2026, the AMT exemption amounts will increase to:3

• $90,100 for single filers
• $70,100 for married couples filing separately
• $140,200 for married couples filing jointly

Retirement Plan Contribution Limits

The IRS increases contribution limits for tax-advantaged retirement accounts each year. For 2025, those contribution limits are:4

• 401(k), 403(b), and 457 plans. Contribution limits rose to $24,500 (up from $23,500 in 2025). Catch-up contributions for those 50 and older rose to $8,000 (up from $7,500 in 2025). For employees ages 60, 61, 62 and 63, the catch-up contribution limit remains $11,250 (the same as 2025).
  
   
• IRAs. Limits increased to $7,500 (from $7,000 in 2025). The catch-up contribution for those 50 and older rose to $1,100 (up from $1,000 in 2025).

Health Savings Account (HSA) Contribution Limits

HSAs provide a triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses. For 2026, HSA contribution limits are:

• Self-only coverage: $4,400 (up from $4,300 in 2025)
• Family coverage: $8,750 (up from $8,550 in 2025)

Gift and Estate Tax Exemptions

The annual gift tax exemption increases to $19,000 per recipient (up from $19,000 per recipient in 2025).3

The lifetime estate tax exemption also increased for 2025. Estates of decedents who die during 2025 can exclude up to $13,990,000 from federal estate taxes (up from $13,610,000 for 2024. These increased limits allow you to transfer more wealth tax-free.

Tax Changes From the One Big Beautiful Bill Act

The passage of the OBBBA resolved many of the uncertainties surrounding expiring Tax Cuts and Jobs Act (TCJA) provisions. Rather than allowing major parts of the TCJA to sunset at the end of 2025, the OBBBA made many tax provisions permanent and introduced several new rules and incentives.

Under the OBBBA, the following TCJA provisions are now permanent:

• Expanded Child Tax Credit (CTC)
• Cap on home mortgage interest deductions
• Cap on state and local tax (SALT) deductions
• Pass-through business income deduction

• Deductions for qualified tip and overtime income
• New starter savings accounts for children
• Expanded use of 529 plans
• New deduction for auto loan interest
• New deduction for taxpayers age 65 and older
• Charitable deduction for non-itemizers
• Limitation on itemized deductions for high-income taxpayers

At this stage, it’s a good idea to work with a tax advisor to understand how these changes will impact your tax filings and work with a financial advisor to identify opportunities to balance tax strategy with long-term wealth-building.