2026 Tax Law Updates: What Changed and What Matters for Planning

Each year, tax season brings a mix of routine paperwork and meaningful rule changes. While tax reform is often promoted as simpler, the reality is that many households still face a complex and evolving tax landscape.

As we begin 2026, I want to highlight the most important tax updates that may affect planning decisions this year and beyond. This overview focuses on education—not personalized advice—but it should help frame more productive conversations with your tax professional.

Standard Deduction Increases for 2026

Inflation adjustments continue to raise the standard deduction, and the One Big Beautiful Bill (OBBB) Act added an extra boost.

For tax year 2026, the standard deduction is:

• $16,100 for single filers and married filing separately

• $32,200 for married filing jointly and surviving spouses

• $24,150 for heads of household

  
  

For households that do not itemize, these increases directly reduce taxable income.

Expanded SALT Deduction — But Only Temporarily

One of the most notable provisions of the OBBB Act is the temporary expansion of the state and local tax (SALT) deduction cap.

• The cap rises to $40,000 ($20,000 if married filing separately)

• Available to taxpayers earning under $500,000

• The cap increases by 1% annually through 2029

  
  

Beginning in 2030, the cap is scheduled to revert to $10,000. This temporary window may create planning opportunities for certain households.

2026 Federal Income Tax Brackets

The seven federal income tax brackets established in 2017 were permanently extended under the OBBB Act. These rates apply to taxable income, which is income after subtracting either the standard deduction or itemized deductions.

Tax credits operate differently and reduce tax liability dollar for dollar.

Trusts, AMT, and Estate Planning Updates

• Alternative Minimum Tax (AMT):

  The exemption amount rises to $90,100 for unmarried filers and $140,200 for married couples filing jointly, with phaseouts at higher income levels.

  
  

• Estate Tax Exemption:

  The estate exemption increases to $15 million per individual.

  
  

• Annual Gift Tax Exclusion:

  Remains $19,000 per recipient, or $38,000 for married couples who elect gift splitting. Tuition and medical payments made directly remain unlimited.

  
  

Family-Related Tax Credits

Child Tax Credit

• $2,200 per qualifying child

• Refundable credit of up to $1,700

• Income phaseouts begin at $200,000 for single filers and $400,000 for joint filers

  
  

Adoption Credit

• Maximum credit increases to $17,670

• Up to $5,120 may be refundable

• Subject to income phaseouts

  
  

Capital Gains and Net Investment Income Tax

Long-term capital gains and qualified dividends continue to receive favorable tax treatment compared to ordinary income. Holding investments for more than one year remains a key tax-management strategy.

High-income taxpayers should also be mindful of the 3.8% net investment income tax, which applies once income exceeds fixed thresholds that are not indexed for inflation.

Retirement and Health Savings Account Limits

For 2026:

• IRA contributions:

  $7,500 (under age 50)

  $8,600 (age 50 or older)

• SEP IRA limit:

  Up to $72,000, depending on income

• Health Savings Accounts:

  $4,400 (self-only)

  $8,750 (family)$1,000 catch-up for those age 55+

  
  

Temporary OBBB Provisions to Watch

Several temporary provisions are scheduled to run through 2028, including:

• No tax on qualified tips

• No tax on qualified overtime wages

• Enhanced deductions for seniors age 65+

• Deduction for interest on qualifying U.S.-assembled vehicle loans

• Federally sponsored savings accounts for newborns

  
  

Because these provisions are temporary and income-dependent, proactive planning is essential.

Final Thoughts

Tax law changes rarely stand alone—they interact with cash flow, investment strategy, retirement planning, and estate decisions. Staying informed is the first step, but thoughtful coordination is where real value is created.

If you’d like to talk through how these 2026 tax updates may fit into your broader financial plan, I encourage you to schedule a conversation with me through the link below.

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.