When the One Big Beautiful Bill Act (OBBBA) was passed back on July 4, the new legislation left several unanswered questions that the IRS has begun to address in recent months, including federal income tax brackets, standard deductions, and retirement contribution limits for 2026.
Federal Income Tax Brackets
In early October, the IRS announced new federal income tax brackets for 2026.1,2
Standard Deduction
The standard deduction will also increase in 2026, rising to $32,200 for married couples filing jointly, up from $31,500 in 2025. Starting in 2026, single filers can claim $16,100, a bump up from $15,750.
Individual Retirement Accounts (IRAs)
IRA contribution limits are up $500 in 2026 to $7,500. Catch-up contributions for those over age 50 are up $100 to $1,100, bringing the total limit to $8,600.
Roth IRAs
The income phase-out range for Roth IRA contributions increases to $153,000-$168,000 for single filers and heads of households. For married couples filing jointly, the phase-out will be $242,000 to $252,000. Married individuals filing separately see their phase-out range remain at $0-10,000.
Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $1,000 increase for 2026, the limit rising to $24,500. Those aged 50 and older will now have the ability to contribute an extra $8,000, bringing their total limit to $32,500. Those aged 60, 61, 62, and 63 may enjoy a higher catch-up contribution of $11,250, raising their total contribution limit to $35,750.
SIMPLE Accounts
A $500 increase in limits for 2026 gives individuals contributing to this incentive match plan a $17,000 stoplight. Pursuant to the Secure Act 2.0, certain applicable plans have an increased limit of $18,100.
Other Changes
In addition to tax bracket and contribution limit changes, the IRS also announced several other amendments for 2026, including an increase to the annual exclusion for gifts to $19,000 per person and an increase to the estate tax exclusion threshold.
Keep in mind that we provide these updates for informational purposes only, so be sure to consult with a tax professional before making any changes to your tax strategy in anticipation of the new 2026 levels. If you have any questions about these changes or how they might affect your personal financial plan, please feel free to reach out.
1IRS.gov, October 9, 2025.
2This is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals before modifying your tax strategy based on any changes announced by the IRS.