12/24/2025
🚨Important Taxes Information for 2026🚨
Here are the key developments every taxpayer and advisor should have on their radar:
Standard deduction increases:
• Single: $16,100
• Head of Household: $24,150
• Married Filing Jointly: $32,200
These higher thresholds can shift tax-planning strategies, especially for clients hovering near itemization break-even points.
Expanded benefits for seniors:
• Larger additional deductions for those 65+
• A new “senior bonus deduction” (up to $6,000 for individuals; $12,000 for couples)
• Income-based phaseouts that require careful review
This makes proactive planning essential for retirees and near-retirees.
Adjusted tax brackets for inflation:
• Rates stay at 10–37%, but thresholds shift
• Important for withholding adjustments, estimated payments, and bracket-management strategies
Clients with variable income will want to revisit projections early.
Retirement contribution limits increase:
• 401(k), 403(b), 457 plans: $24,500
• IRAs: $7,500
• Higher HSA contribution limits
Advisors should revisit savings plans to ensure clients maximize tax-advantaged space.
New catch-up contribution rules:
• High-income individuals age 50+ must make catch-ups as Roth contributions
• Impacts both cash flow planning and long-term tax diversification
This is one of the most significant behavioral shifts for older, higher-income earners.
New deductions for specific groups:
• Tipped workers: deduction of up to $25,000 in qualified tip income
• Certain borrowers: potential deduction of auto-loan interest if qualifying criteria are met
IRS’s “Direct File” program ends after 2025:
• Taxpayers who used it will need a new filing path
• Advisors may see increased demand for support as users transition away from the program
Bottom line: These changes are material, & many taxpayers will either miss opportunities or create avoidable exposure without proactive planning.
