2026 Tax Rates & Inflation Adjustments

Passed in July 2025, the One Big Beautiful Bill Act (OBBBA) is a sweeping tax and spending package that extends many provisions of the Tax Cuts and Jobs Act (TCJA) which were scheduled to sunset at the end of 2025. See Evan Anderson’s article outlining the new deductions, credits, and planning opportunities for individuals, families, and businesses.

As we approach 2026, now is a great opportunity to get ahead of the curve by planning for the anticipated inflation-related updates to tax brackets, deductions, and contribution limits.

The cost-of-living adjustments and tax changes for 2026 were released by the IRS in Revenue Procedure 2025-32 (PDF) and Notice 2025-67 (PDF).

In 2026, the income tax brackets will again shift in line with inflation, with roughly a 2.3% adjustment. Summarized below are the updates we feel will be of most interest to our readers. You can also download our two-page tax reference guide (PDF) for a more comprehensive overview and reminder of other limits which may impact you but have not changed. The figures reflected in this article are as December 2025. To the extent any additional changes are introduced after this date, we will update this article and the reference dates so you can be sure you have the most current information.

Highlights of Adjustments for 2026

¹ A married filer who is blind or over age 65 can claim an additional $1,650. Two married filers who are both over age 65 or blind can claim $3,300, up $100 from 2025.
² Single or head-of-household filers who are blind or over age 65 can claim an additional $2,050 standard deduction, up $50 from 2025.

Note: As part of OBBBA, filers age 65 and older will receive a temporary, “enhanced” deduction based on modified adjusted gross income (MAGI) from 2025 through 2028. Eligible single filers will receive $6,000; phaseouts begin when MAGI exceeds $75,000. A married couple filing jointly will receive $12,000 when both taxpayers are eligible; phaseouts begin when MAGI exceeds $150,000. Read more here.

Contribution limits for Traditional IRAs, Roth IRAs, and IRA and Elective Deferral Plan catch-up contributions are all indexed to inflation. IRA contribution limits and catch-up contribution limits have increased for 2026. Elective deferral plan contribution limits and catch-up contribution limits for individuals age 50 or older have also increased; catch-up contributions for individuals age 60 to 63 remain unchanged from last year.

Adjustments were also made to the AGI phase-outs for Roth contributions and deductible IRA contributions. The updated limits and phase-outs are shown below.

³ Check with your advisor for the limits applicable to SEP, SIMPLE, and defined contribution plans.
⁴ Elective deferral plans include 401(k) plans, 403(b) plans, most 457 plans, and Thrift Savings plans

⁵ Not subject to an annual cost-of-living adjustment
There are many other cost-of-living adjustments for 2026 which may impact you. Review Revenue Procedure 2025-32 (PDF) and Notice 2025-67 (PDF), and consult your CPA to see if there are others you need to be aware of for your specific situation.

This information is believed to be accurate at the time of publication but should not be used as specific investment or tax advice as opinions and legislation are subject to change. You should always consult your tax professional or other advisors before acting on the ideas presented here.