November 2025 Financial Planning Update: Key 2026 Tax Adjustments Announced
A dollar today isn’t what it was last year, and it won’t be the same as a dollar next year. This is the core concept of inflation, and it’s why the IRS is required to adjust all the key tax provisions, retirement limits, and exemption amounts every fall.
These announcements can look like a dry list of numbers, but they have a direct and powerful impact on your financial life. They determine how much you can save in your 401(k), how your income is taxed, and how much wealth you can pass on to the next generation.
As part of our November 2025 Financial Planning Update, we’ve broken down the official 2026 inflation adjustments. Here are the key numbers you need to know for your tax planning.
Inflation Adjustments for 2026
The Internal Revenue Service (IRS) recently announced the 2026 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes.
Federal Income Tax Rates
The top rate remains 37% for individual single taxpayers with incomes greater than $640,600 ($768,700 for married couples filing jointly).
The other rates are:
- 35% for incomes over $256,225 ($512,450 for married couples filing jointly)
- 32% for incomes over $201,775 ($403,550 for married couples filing jointly)
- 24% for incomes over $105,700 ($211,400 for married couples filing jointly)
- 22% for incomes over $50,400 ($100,800 for married couples filing jointly)
- 12% for incomes over $12,400 ($24,800 for married couples filing jointly)
- The lowest rate is 10% for incomes of single individuals $12,400 or less ($24,800 for married couples filing jointly).
Standard Deduction
The standard deduction increases to $32,200 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,100 for tax year 2026.
The additional standard deduction amount for the aged or blind is $1,650. If the individual is also unmarried and not a surviving spouse, this additional amount increases to $2,050.
Alternative Minimum Tax Exemption
The exemption amount for unmarried individuals is $90,100 and begins to phase out at $500,000 ($140,200 for married couples filing jointly for whom the exemption begins to phase out at $1,000,000).
Child Tax Credit
The OBBBA made the increased and expanded child tax credit permanent. For taxable years beginning in 2026, the maximum amount of the credit allowed is $2,200. The amount used to determine the refundable portion of the credit is $1,700.
Estate Tax
Estates of decedents who die during 2026 have a basic exclusion amount of $15,000,000, up from a total of $13,990,000 for estates of decedents who died in 2025. A couple could pass $30,000,000 estate tax-free.
Annual Exclusion for Gifts
The annual exclusion for gifts remains at $19,000. A couple could gift $38,000 in 2026 with no gift tax implications.
Retirement Plan & Savings Updates
Employee elective deferrals to 401(k)s increase to $24,500 (up from $23,500 in 2025). Age 50+ catch-up contributions rise to $8,000 (from $7,500).
Starting Jan 1, 2026, for participants age 50+ who earned more than ~$145,000 in the prior year, catch-up contributions in 401(k) must be Roth (after-tax) rather than pre-tax.
Social Security & FICA / Benefit Updates
The cost-of-living adjustment (COLA) for Social Security Administration (SSA) benefits is +2.8% for 2026.
The taxable maximum earnings subject to Social Security (OASDI) increases to $184,500 for 2026 (from $176,100 in 2025).
Making These Numbers Work for You
These new limits and brackets are the “what.” Your financial plan is the “how.” Seeing how the new 401(k) limits, updated tax brackets, and higher estate exclusions fit into your personal strategy is the most important next step.
Let’s talk about how these updates affect your savings plan and tax projections. Contact Us to schedule a review of your plan.
