2026 Tax Update

Tax rates change annually. These are the updates for 2026.

2026 income tax brackets

For individuals, taxable income over…

$1	10%
$12,400	12%
$50,400	22%
$105,700	24%
$201,775	32%
$256,225	35%
$640,600	37%

For married couples filing joint returns, taxable income over…

$1	10%
$24,800	12%
$100,800	22%
$211,400	24%
$403,550	32%
$512,450	35%
$768,700	37%

For heads of households, taxable income over…

$1	10%
$17,700	12%
$67,450	22%
$105,700	24%
$201,750	32%
$256,200	35%
$640,600	37%

2026 Standard Deduction

Filing as	Under 65	Age 65 +
Individuals	$16,100	$18,150*
Married filing joint	$32,200	$33,850**
Head of household	$24,150	$26,200*

* Single and age 65 plus, add $2,050.
**Each married person age 65 or over add $1,650.

2026 Long-term capital gains rates

#LTCG

For unmarried individuals, taxable income over…

$1	0%
$49,450	15%
$200,000	18.8%*
$545,500	23.8%*

For married individuals filing joint returns, taxable income over…

$1	0%
$98,900	15%
$250,000	18.8%*
$613,700	23.8%*

For heads of household, taxable income over…

$1	0%
$66,200	%15
$200,000	18.8%*
$579,600	23.8%*

*Includes 3.8% net investment income tax

2026 IRA contribution limits

#IRA

Under age 50	$7,500
Age 50 or over	$8,600

Traditional and Roth IRA contribution limits

Depending upon whether or not you and your spouse have a retirement plan at work, your IRA contribution may not be tax deductible and a Roth contribution might not be possible. Scroll down.

When do you have to take your required minimum distribution (RMD)?

2026 Traditional IRA deductible contribution income limits

#DEDUCTIBLE

Covered by a plan at work

Single or Head of Household…	….and your Modified AGI is…	…then you can take…
	$81,000 or less	full deduction
	in between	partial deduction
	$91,000 or more	no deduction
Married filing jointly or qualifying widower…	…and your Modified AGI is…	…then you can take…
	$129,000 or less	full deduction
	in between	partial deduction
	$149,000 or more	no deduction

Follow this chart if you do have a retirement plan at work

Not covered by a plan at work

Single, Head of Household or Qualifying Widower	Regardless of your income…	…you can take a full deduction
Married with a spouse who does not have a plan at work	Regardless of your income…	…you can take a full deduction
Married with a spouse who does have a plan at work …	…and your Modified AGI is…	…then you can take…
	$242,000 or less	full deduction
	in between	partial deduction
	$252,000 or more	no deduction

Follow this chart if you don’t have a retirement plan at work

2026 Roth IRA contribution income limits

#Roth

Roth IRA contributions, but not Roth conversions, are limited by income.

2025 income	Single	Married Filing Jointly
May make a full Roth contribution	$153,000 or less	$242,000 or less
Contribution gradually reduced	in between	in between
Not eligible	$168,000 or more	$252,000 or more

Maximum income for Roth contributions

2026 SEP and Simple IRA contribution limits

#SEP

SEP IRAs and Simple IRAs allow larger contributions than IRAs, but as discussed in the book, require rules to be followed.

SEP	$72,000
Simple	$17,000

The Simple IRA allows another $4,000.00 contribution if you are over age 50.

Employee elective deferral limit is $17,000, increasing to $18,100 for employees of small businesses (≤25 employees) under SECURE 2.0.

“Super” catch-up for those aged 60–63 remains at $5,250.

2026 401k contribution limits

#401K

Employee	$24,500
Max including employer	$72,000
Over age 50 “catch up” amount*	$8,000
Age 60 to 63 “catch up” amount*	$11,250
Highly-compensated employee, income above	$235,000

*Maximum for ages 50 – 59 is $31,000. Max for ages 60 – 63 is $34,750.

2026 estate tax and gift tax

#ESTATE

The estate tax exemption is:

Unmarried individuals	$15 million
Married couples	$30 million

These limits expire in 2026.

The annual gift tax exclusion is $19,000.

Charitable contributions

#charity

Donating to a Qualified Charity:

% of AGI for cash contributions	60%
% of AGI for appreciated assets	30%

People over age 70½ may use a Qualified Charitable Distribution, or QCD, to make a donation up to $105,000.

2026 Social Security and Medicare Taxes

#FICA

These are also called FICA taxes, or payroll taxes.

Maximum earnings subject to Social Security Tax (OASDI):	$184,500
OASDI tax rate	12.4%
Max earnings subject to Medicare tax	no cap
Medicare tax rate	2.9%

Self-employed people pay all of it: 15.3%. Or, for employees, the employee pay half, employers pay half.

Medicare surtax (IRMAA) in 2026

#IRMAA

IRMAA looks back two years. So for 2026, we look at year 2024 modified adjusted gross income above….

Single	MFJ	MF Separate	Part B Premium	Part D surtax
$1	$1	$1	$185.00	$0
$107,000	$214,000	$107,000	$259.00	$13.70
$134,000	$268,000		$370.00	$35.30
$168,000	$336,000		$480.90	$57.00
$202,000	$404,000		$591.90	$78.60
$500,000	$750,000	$403,000	$628.90	$85.80

Income earned two years ago forces a monthly Medicare surtax for up to two years.

2026 HSA, HRA and FSA

#HSA

HSA

Health savings accounts

HSA annual contribution individual	$4,400
HSA annual contribution family	$8,750
HSA over age 55 catch-up	$1,000

QSEHRA

Small business HRA (health reimbursement arrangement):

QSEHRA annual contribution limit individual	$6,650
QSEHRA annual contribution limit family	$13,300

FSA

Flexible Spending Accounts

FSA contribution limit	$3,300
Dependent care FSA contribution limit	$5,000

To get a tax-deduction for an HSA contribution, then you must have a high deductible health insurance plan. Here are the minimum deductibles for 2025:

Min. HSA individual deductible	$1,700
Min. HSA family deductible	$3,400

Also, an HSA approved insurance plan must have a maximum out of pocket cost that does not exceed $8,850 or $17,700 for individuals and families.

Contact an AIWM Financial Planner

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