In July 2025, Congress passed the One Big Beautiful Bill Act (yeah, that's really what they called it), which made most of the Tax Cuts and Jobs Act provisions permanent. So instead of scrambling to figure out what happens when everything expires, we now have a clearer picture of what the tax landscape actually looks like going forward.
But that doesn't mean nothing changed. The IRS still made its annual inflation adjustments, and there are some new rules worth understanding—especially if you're planning for retirement, thinking about charitable giving, or managing equity compensation.
Let's walk through what's different in 2026 and, more importantly, what it means for your financial plan.
The Big Picture: Permanence Instead of Panic
For the past few years, financial planning conversations revolved around preparing for the TCJA to expire. That created a lot of urgency around strategies like Roth conversions, bunching charitable contributions, and accelerating gifts to family members—all to take advantage of rules that were about to disappear.
Now? Those favorable tax rates, higher standard deductions, and elevated estate tax exemptions are sticking around. That changes the calculus. Instead of treating these as short-term opportunities, we can think about them as permanent parts of your long-term strategy.
Tax Brackets: Another Year, Another Inflation Bump
Tax brackets increased by 2.8% for 2026 to keep pace with inflation. The top tax rate stays at 37%, and the overall bracket structure remains the same as it has been since 2018.
What this means for you: Your paycheck might feel a little better next year because you'll owe slightly less in taxes on the same amount of income. It's not a dramatic shift, but it's something.
The standard deduction also got its inflation adjustment. For 2026, single filers get $15,600, and married couples filing jointly get $31,200. That's up from $15,200 and $30,400 in 2025.
Retirement Contributions: Limits Are Going Up (Mostly)
If you're contributing to retirement accounts, 2026 brings some good news. The limits are increasing across the board.
401(k) and 403(b) plans: The employee contribution limit rises to $24,500 (up from $23,500 in 2025). If you're 50 or older, you can add another $7,500 as a catch-up contribution, bringing your total to $32,000.
The catch-up contribution twist: Here's where it gets a bit more complicated. Starting in 2026, if you earned more than $145,000 in the prior year and you're 50 or older, your catch-up contributions must go into a Roth account rather than a traditional pre-tax account. This only affects the catch-up portion—you can still make your regular $24,500 contribution as pre-tax or Roth.
Some employers are getting a grace period through the end of 2026 to implement this change, so your company might not enforce it until 2027. Check with your HR department to see how they're handling it.
IRAs: Contribution limits for traditional and Roth IRAs are increasing to $7,500 for 2026, with an extra $1,100 catch-up contribution for those 50 and older.
Social Security: More of Your Income Is Taxable
The wage base for Social Security taxes is jumping to $184,500 in 2026, up from $176,100 in 2025. If you're a high earner, that means more of your income will be subject to the 6.2% Social Security tax.
For someone maxing out this limit, it's an extra $520 in Social Security taxes compared to 2025. Not huge, but worth knowing about when you're planning your cash flow.
What About SALT and Charitable Giving?
The One Big Beautiful Bill Act made some changes here, though the details are still being finalized.
State and local tax (SALT) deduction: The $10,000 cap that's been in place since 2018 is getting modified with a higher limit and income-based phaseouts. If you live in a high-tax state, this could be meaningful—but we're still waiting on the final rules.
Charitable contributions: New limits are coming for charitable deductions starting in 2026. Again, specifics are pending, but if you're doing significant charitable giving, it's worth keeping an eye on how these rules shake out.
Estate and Gift Tax: Still Generous
The lifetime estate and gift tax exemption remains elevated and will continue to adjust for inflation. For 2026, you can expect it to be around $14 million per person (roughly $28 million for a married couple).
This is now permanent, which changes how we think about estate planning. Before, there was pressure to make large gifts while the high exemption was available. Now, you can take a more measured approach based on what actually makes sense for your family.
So What Should You Actually Do?
Here's the thing: tax law changes are interesting, but they're only meaningful if they inform better decisions.
Roth conversions are still worth considering. Tax rates are relatively low and will stay that way. If you expect your income (or tax rates) to be higher in retirement, converting traditional IRA dollars to Roth could make a lot of sense—especially in years when your income dips temporarily.
Max out retirement accounts when it makes sense. The contribution limits keep going up, and that's a good thing. But don't automatically max everything out just because you can. Make sure it fits within your overall cash flow and goals.
Revisit your charitable giving strategy. With new rules coming for charitable deductions, it might be time to look at donor-advised funds, bunching strategies, or qualified charitable distributions if you're over 70½.
Think about the forced Roth catch-up rule. If you're a high earner making catch-up contributions, you'll need to plan for the fact that those contributions will now be Roth. That means more upfront tax, but tax-free growth going forward.
Don't ignore the SALT changes. If you're in a high-tax state and have been bumping up against the $10,000 cap, the new rules might give you some relief. Once we have the final details, it could change how you approach deductions.
The Real Takeaway
Tax planning isn't about chasing every little rule change or trying to optimize for the absolute lowest tax bill in any given year. It's about understanding the landscape and making intentional decisions that support the life you're building.
The permanence of the TCJA provisions means we can take a longer view. Strategies like Roth conversions, tax-efficient withdrawal planning, and thoughtful charitable giving remain powerful tools—but now we can use them as part of a sustained, multi-decade strategy rather than a short-term scramble.
And look, tax law is complicated. These adjustments happen every year, and sometimes the details don't shake out the way we expect. That's why it's worth having someone in your corner who's paying attention to this stuff and thinking about how it applies to your specific situation.
Because at the end of the day, the goal isn't to know everything about the 2026 tax code. It's to make sure your financial plan adapts as the rules change—so you can focus on what really matters.
This post is for educational purposes only and shouldn't be considered specific tax advice. Tax situations are highly individual, and you should consult with a qualified tax professional about your own circumstances.