Key provisions under the One Big Beautiful Bill Act (OBBBA) and Secure 2.0 Act beginning or increasing in 2026 could have a significant impact on your financial plan.
Significant tax rules that were set to expire at the end of 2025 are now here to stay. Standard deductions received a boost to $32,200 for married filing jointly and $16,100 for single filers, and the top ordinary income tax rate is 37%.
Through the end of 2028, the deduction for state and local income taxes (SALT) increases from $10,000 to $40,000, indexed for inflation. High income earners have a phase-out back down to $10,000. This provision alone may save taxpayers thousands of dollars over previously capped deductions.
If charitable giving is important to you, keep in mind that new rules will limit the tax benefit of itemized charitable donations. Your charitable deductions will be subject to a floor of .5% and if you’re in the 37% tax bracket the benefit of your itemized deductions will be capped at 35%.
If you don’t itemize, an additional charitable deduction of up to $1,000 for single filers and $2,000 for married taxpayers filing jointly will be allowed as an above the line deduction for certain cash contributions to qualified charities.
The lifetime gift and estate exemption was permanently increased to $15 million per taxpayer.
Each year the IRS announces annual contribution limits for employer plans. For 2026, employees under 50 are allowed a contribution of $24,500, age 50-59 and 64+ are allowed additional catch-up contributions of $8,000, and age 60-63 are allowed super catch-up contributions of $11,250. Beginning in 2026, workers who are 50 or older who earned more than $150,000 in FICA wages in the prior year will need to make any catch-up contributions on a Roth basis.
There are many additional provisions that may impact how you plan, invest, and give. We can help simplify complex tax laws, build a tailored strategy that supports your financial goals, and proactively partner with your existing team of accountants to implement strategies for tax optimization with your bigger financial picture in mind.
To learn more, please reach out.
