As we open 2026, there are meaningful tax updates that can help you save more, protect more, and plan smarter. Below is a concise roundup of the changes that matter most for individuals and families—plus practical steps you can take now to make this year work in your favor.
1) Retirement Account Limits Are Higher for 2026
- 401(k)/403(b)/457/TSP employee contributions: $24,500 (up from $23,500 in 2025).
- Age 50+ catch‑up (most employer plans): $8,000 (up from $7,500).
- Enhanced catch‑up for ages 60–63: $11,250 (plan‑dependent; unchanged from 2025).
- IRA contribution limit: $7,500 (up from $7,000). IRA catch‑up (50+): $1,100.
Why it matters: These increases expand the room to shelter income, accelerate retirement savings, and rebalance taxable vs. tax‑advantaged holdings.
2) Estate & Gift Tax: Higher Lifetime Exemption, Gift Exclusion Steady
- Federal lifetime estate & gift tax exemption (per person): $15,000,000 for 2026 ($30,000,000 married).
- Annual gift tax exclusion: $19,000 per recipient (unchanged from 2025).
Planning note: The higher lifetime exemption is now permanent under current law and indexed going forward, but Congress can always legislate changes. Consider whether to use additional exemption strategically in 2026.
3) Capital Gains: Rates Unchanged (0%, 15%, 20%); Policy Watch Continues
Current long‑term capital gains brackets remain in place; we’re monitoring ongoing policy discussions that could affect high‑income filers. If you anticipate a large asset sale in 2026, proactive planning (tax‑loss harvesting, basis management, charitable strategies) remains essential.
4) IRS Compliance Focus
The IRS continues to prioritize high‑income/non‑filer enforcement and complex issues (pass‑throughs, digital assets). Strong documentation, withholding estimates, and quarterly payments reduce audit risk and penalties.
What to Do in Early 2026
- Max your savings: Update payroll deferrals to reflect the $24,500 limit (and applicable $8,000 or $11,250 catch‑ups).
- Tune your IRA plan: Set 2026 contributions at $7,500 (add $1,100 if 50+).
- Refresh your estate plan: Revisit gifting and trust strategies in light of the $15M lifetime exemption and $19,000 annual exclusion.
We’re Here to Help—Let’s Make 2026 Count
Whether you’re increasing deferrals, considering a large gift, or planning a significant transaction, our team will tailor strategies to your goals and timeline. Contact us at theKFORDgroup to schedule a planning session.
