Major Tax Changes in 2026

Updated Federal Tax Brackets

The IRS adjusts tax brackets annually for inflation. For 2026, the 10% and 12% bands widened about 4% (OBBBA adds an extra adjustment to them) and the higher bands about 2.3%, meaning you can earn more before moving into the next tax bracket.

Example: The 22% bracket for single filers now starts at $50,400 of taxable income (up from $48,475 in 2025). On $55,000 of taxable income, only $4,600 is now taxed at 22% instead of $6,525.

Standard Deduction Increase

The 2026 standard deduction increased for all filing statuses:

• Single: $16,100 (up $350)
• Married filing jointly: $32,200 (up $700)
• Head of household: $24,150 (up $525)

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 $1,000)
• Catch-up contribution (50+): $8,000 (up $500)
• IRA: $7,500 (up $500)
• IRA catch-up (50+): $1,100 (first indexed increase)
• HSA (individual): $4,400 (up $100)
• HSA (family): $8,750 (up $200)

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.