Each year, the IRS releases updated financial thresholds that quietly shape many of the decisions families make around taxes, retirement, and long-term planning.
The 2026 updates don’t introduce sweeping tax reform—but they do expand both the opportunity and the consequences of proactive planning. Below is a visual of all of the new numbers, and then a breakdown of what you need to know.
Here are the most important changes to be aware of—and how they fit into the bigger picture.
1. Estate & Gift Exemptions Remain Historically High
For 2026, the federal estate, gift, and generation-skipping transfer exemption increases to $15 million per person, with a top tax rate of 40%.
The annual gift exclusion also rises to $19,000 per recipient, allowing families to transfer more wealth each year without using lifetime exemption.
Why this matters:
These elevated limits create meaningful flexibility for families thinking about legacy, gifting, and long-term wealth transfer. While no immediate changes are required, this remains a window worth planning around—especially for households whose net worth may exceed future limits.
Estate planning works best when it’s proactive and intentional, not reactive.
2. Income Tax Rates Stay the Same—But Brackets Continue to Creep Up
The overall tax structure remains unchanged in 2026, but inflation adjustments push bracket thresholds higher. The top 37% marginal rate now begins at:
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- $640,600 for single filers
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- $768,700 for married couples filing jointly
Why this matters:
Even without new tax laws, higher income can quietly move more dollars into higher brackets. This reinforces the importance of income timing, retirement contributions, and tax-aware planning, especially for executives, business owners, and dual-income households.
3. Standard Deductions & Child Tax Credit Increase Modestly
For 2026, standard deductions rise again:
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- $32,200 – Married filing jointly
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- $16,100 – Single or married filing separately
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- $24,150 – Head of household
The Child Tax Credit increases to $2,200 per child, with $1,700 refundable and phaseouts beginning at higher income levels.
Why this matters:
Most families will continue using the standard deduction, making tax efficiency less about itemizing expenses and more about coordinating income, savings, and investment decisions across the full financial picture.
4. Retirement Savings Limits Rise—Creating More Opportunity and More Complexity
Several retirement limits increase in 2026:
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- 401(k), 403(b), and 457 deferrals: $24,500
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- Catch-up contributions:
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- $8,000 for ages 50–59 and 64+
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- $11,250 for ages 60–63
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- Catch-up contributions:
Why this matters:
Higher limits reward intentional planning—but simply “maxing out” isn’t a strategy on its own. The real value comes from coordinating contributions across accounts, tax brackets, and long-term goals so today’s savings support tomorrow’s flexibility.
5. Social Security Benefits Increase—Taxes Still Apply
The estimated maximum monthly Social Security benefit at full retirement age (67) rises to $4,152 in 2026.
However, the taxation rules remain the same: up to 85% of benefits may be taxable, depending on total income.
Why this matters:
Claiming decisions don’t happen in isolation. Social Security should be coordinated with withdrawal strategies, tax planning, and portfolio structure to avoid unnecessary tax drag over time.
6. Investment Tax Rules Stay the Same—After-Tax Results Still Matter
Long-term capital gains rates remain unchanged at 0%, 15%, and 20%, and the Net Investment Income Tax thresholds are also unchanged.
Why this matters:
When tax rules stay stable, the advantage shifts to those who plan around them. Asset location, gain management, and withdrawal sequencing continue to play a meaningful role in long-term, after-tax outcomes.
Bringing It All Together
The 2026 updates don’t call for dramatic changes—but they do reinforce an important truth:
Financial confidence comes from clarity and coordination, not reacting to headlines.
When planning decisions work together—across taxes, retirement, investments, and legacy—they help reduce complexity and support long-term confidence.
If you have questions about how these 2026 updates apply to your situation, this is a good time to review your plan and ensure everything remains aligned with your goals.
For informational purposes only. Not intended as investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000. Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.