The IRS recently announced several updates that will shape tax and financial planning in both 2025 and 2026. These include higher retirement plan contribution limits, adjustments to tax brackets, and increases to the standard deduction. These changes give you more room to save and more opportunities to manage your tax bill.
The One Big Beautiful Bill Act (OBBBA) introduced new rules beginning in 2025. The standard deduction increases to $15,750 for single filers and $31,500 for married couples filing jointly.
In 2026, the standard deduction will rise to $16,100 for single filers and $32,200 for married couples filing jointly. Taxpayers who are 65 or older can take an additional inflation-adjusted deduction of $2,050 if single or $1,650 per qualifying spouse if married.
Note: A new temporary $6,000 bonus deduction is also available for taxpayers age 65 and older with income up to $75,000 (single) or $150,000 (married). This deduction runs from 2025 to 2028 and supplements the existing additional standard deduction.
Account Type |
2026 Limit |
| 401(k)/403(b)/457 Employee Contribution |
$24,500 |
|
401(k)/403(b)/457 Catch-Up (Age 50+) |
$8,000 |
|
401(k)/403(b)/457 “Super” Catch-Up (Age 60–63) (Available in certain plans) |
$11,250 |
|
Traditional/Roth IRA Annual Contribution |
$7,500 |
|
Traditional/Roth IRA Catch-Up (Age 50+) |
$1,100 |
|
SEP IRA Maximum Contribution |
Lesser of $72,000 or 25% of eligible comp |
|
SIMPLE IRA Employee Deferral |
$17,000 |
|
SIMPLE IRA Catch-Up (Age 50+) |
$4,000 |
|
SIMPLE IRA “Super” Catch-Up (Age 60–63) |
$5,250 |
Account Type |
2026 Limit |
|
HSA – Individual |
$4,400 |
|
HSA – Family |
$8,750 |
|
FSA |
$3,400 |
|
FSA Rollover Cap |
$680 |
Rate |
Taxable Income Over |
|
37 percent |
$640,600 |
|
35 percent |
$256,225 |
|
32 percent |
$201,775 |
|
24 percent |
$105,700 |
|
22 percent |
$50,400 |
|
12 percent |
$12,400 |
|
10 percent |
$0–$12,400 |
Rate |
Taxable Income Over |
|
37 percent |
$768,700 |
|
35 percent |
$512,450 |
|
32 percent |
$403,550 |
|
24 percent |
$211,400 |
|
22 percent |
$100,800 |
|
12 percent |
$24,800 |
|
10 percent |
$0–$24,800 |
*Please note, since the tax brackets above are for the 2026 tax year, they will generally apply to tax returns filed in 2027; 2025 tax rates will apply to returns filed in 2026.
One of the simplest ways to take advantage of the new limits is to increase your contribution percentage. If you have been contributing the same rate for years, even a small increase can meaningfully boost your long-term savings. Raising your 401(k) contribution by just 1 percent each year can add tens of thousands of dollars to your retirement balance over the long run without significantly changing your take-home pay.
You should also make sure you are contributing enough to receive your full employer match. Many companies match between 3 and 6 percent of salary, and that extra money can make a substantial difference over time, especially as the combined employee and employer limit rises in 2026.
With higher contribution limits, updated tax brackets, and expanded deductions for seniors, 2026 offers several opportunities to strengthen your financial plan. It is worth revisiting your savings levels, making sure you take advantage of tax-advantaged accounts, and confirming that you are capturing every employer benefit available to you. If you want help reviewing your strategy or planning for these changes, contact your Carnegie Financial Advisor to walk through the details with you.
For informational and educational purposes only. The information is not intended to provide specific advice or recommendations, and the information has been obtained from sources believed to be reliable.
Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. For a more detailed discussion about Carnegie’s investment advisory services and fees, please view our Form ADV and Form CRS by visiting: https://adviserinfo.sec.gov/firm/summary/150488.
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