Major Tax Changes in 2026

Updated Federal Tax Brackets

The IRS adjusts tax brackets annually for inflation. For 2026, brackets increased approximately 2.8%, meaning you can earn more before moving into the next tax bracket.

Example: The 22% bracket for single filers now starts at $50,400 (unchanged from 2025; brackets did not move further from inflation indexing because the prior year value already crossed the threshold). If you earn $48,000, only $850 is now taxed at 22% instead of $2,150.

Standard Deduction Increase

The 2026 standard deduction increased for all filing statuses:

• Single: $15,000 (up $1,100)
• Married filing jointly: $30,000 (up $2,200)
• Head of household: $22,500 (up $1,650)

This means more of your income is shielded from taxes, reducing your overall tax bill.

Retirement Contribution Limits

Retirement contribution limits increased for 2026:

• 401(k), 403(b), 457: $24,500 (up $500)
• Catch-up contribution (50+): $7,500
• IRA: $7,000 (unchanged)
• IRA catch-up (50+): $1,000
• HSA (individual): $4,300 (up $150)
• HSA (family): $8,550 (up $300)

Social Security Wage Base

The Social Security wage base increased to $184,500 (from $176,100 in 2025). This means you pay 6.2% Social Security tax on the first $184,500 of income. If you earn more, you don't pay Social Security tax on the excess.

SALT Deduction Cap (OBBBA)

OBBBA (July 2025) quadrupled the SALT cap from $10,000 (TCJA) to $40,400 for 2026 ($40,000 base with 1% annual steps through 2029). For taxpayers with MAGI above $500,000 ($250,000 if MFS), the cap phases down 30¢ per dollar but never below the original $10,000 floor — full phase-down completes at MAGI ~$600,000. The expanded cap reverts to $10,000 in 2030 unless Congress extends. The change primarily benefits itemizers in high-tax states (California, New York, New Jersey, Illinois, Massachusetts) under the $500K phase-down trigger.