With the 2026 tax year nearing its close, taxpayers should review significant updates to standard deductions, retirement contribution limits, and the $15 million estate tax exclusion enacted under recent legislation.
Updated 2026 Standard Deduction and Rate Brackets
For the 2026 tax year, the standard deduction has increased to $16,100 for single filers and $32,200 for married couples filing jointly. Following the passage of the One Big Beautiful Bill Act (OBBBA), the seven marginal tax rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37% have been made permanent. However, the income thresholds for these brackets have been adjusted for inflation. For instance, the top 37% rate now applies to single taxpayers with taxable income exceeding $640,600 and married couples filing jointly with income over $768,700.
Higher Retirement Savings Deferrals for 2026
The IRS has increased the elective deferral limit for 401(k), 403(b), and most 457 plans to $24,500 for 2026. Taxpayers aged 50 and older can contribute an additional $8,000 catch-up amount, bringing their total potential deferral to $32,500. Under SECURE 2.0 provisions effective this year, a specialized catch-up limit of $11,250 is available for participants aged 60 through 63. Additionally, the annual IRA contribution limit has risen to $7,500, with a $1,100 catch-up limit for those 50 and older.
Expanded Estate and Gift Tax Exclusions
The basic exclusion amount for estates of decedents dying in calendar year 2026 is set at $15,000,000, a significant increase from the 2025 level of $13,990,000. This higher threshold provides a substantial window for high-net-worth estate planning before potential future adjustments. For annual gifting, the 2026 exclusion remains at $19,000 per recipient, allowing individuals to transfer assets without incurring gift tax or depleting their lifetime exclusion.
Social Security Wage Base and Benefit Adjustments
Employers and self-employed individuals should note that the maximum amount of earnings subject to the Social Security tax has increased to $184,500 for 2026, up from $176,100 in 2025. This 4.7% increase reflects the latest cost-of-living adjustments (COLA) intended to keep pace with inflationary trends throughout the 2025 measuring period.
Primary sources and further reading
- IRS Revenue Procedure 2025-32 (2026 Inflation Adjustments)
- IRS Notice 2025-67 (2026 Pension Plan Adjustments)
- SSA Fact Sheet: 2026 Social Security Changes
Tax rules depend on the tax year and individual circumstances. Confirm the current IRS guidance before filing.