Key Tax Projections for 2026

Each year, federal tax thresholds are adjusted for inflation. For 2026, Wolters Kluwer has released early projections based on the inflation data published in September 2025. These figures include expected changes to income tax brackets, deductions, credits, and exclusions. While the IRS will issue official numbers later in the year, these projections give taxpayers a sense of what to expect. Even slight adjustments can influence how much income is taxed, how deductions and credits apply, and which strategies are most effective for savings and estate planning. Looking ahead now gives business owners, executives and individuals time to assess and make tax planning adjustments prior to year-end. To help clients, prospects, and others, WhippleWood CPAs has summarized the key details below.

Income Tax Brackets

The One Big Beautiful Bill Act (OBBBA), signed in July 2025, kept current tax brackets in place and avoided a return to pre-2017 rates. These brackets are adjusted for inflation each year. In 2026, they are expected to rise between 2.2% and 4.0%. For example, the 10% bracket for married couples filing jointly is projected to top out at $24,800, up from $23,850 in 2025. Similar increases apply to other filing statuses, though the figures below focus on single filers and married couples filing jointly:

Single Filers

• 10% up to $12,400
• 12% over $12,400 and up to $50,400
• 22% over $50,400 and up to $105,700
• 24% over $105,700 and up to $201,775
• 32% over $201,775 and up to $256,225
• 35% over $256,225 and up to $640,600
• 37% over $640,600

Married Filing Jointly

• 10% up to $24,800
• 12% over $24,800 and up to $100,800
• 22% over $100,800 and up to $211,400
• 24% over $211,400 and up to $403,550
• 32% over $403,550 and up to $512,450
• 35% over $512,450 and up to $768,700
• 37% over $768,700

Standard Deduction

The standard deduction has changed several times in a short period. For 2025 it was set at $30,000 for married couples filing jointly, then OBBBA increased the dollar amount retroactively to $31,500. Projections for 2026 show another increase to about $32,200 for joint filers, with single filers expected at about $16,100 and heads of household at about $24,150.

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) is a separate tax system designed to make sure higher-income taxpayers pay a minimum level of tax, even if deductions or credits reduce liability. The AMT exemption shields a portion of income from this calculation, much like a standard deduction. For 2025, the exemption is $137,000 for married couples filing jointly and $88,100 for single filers and heads of household. Projections for 2026 show a modest increase to $140,200 for joint filers and $90,100 for single and head of household filers.

Retirement Contribution Levels

The contribution limit for both Roth and Traditional IRAs is projected at $7,500 for 2026, up from $7,000 in 2025. For individuals ages 50+, the catch-up contribution is projected to increase from $1,000 in 2025 to $1,100 in 2026; this is separate from the SECURE 2.0 super catch-up. The limit applies across both types of IRAs, meaning a taxpayer can divide contributions between Roth and Traditional accounts but cannot exceed the total cap.

Projections are also available for phaseout limits. For Roth IRAs, single filers are expected to see eligibility phase out between $153,000 and $168,000 of modified adjusted gross income in 2026. For married couples filing jointly, the projected phaseout range is $242,000 to $252,000.

For Traditional IRAs, deduction limits depend on workplace plan coverage. In 2026, the deduction begins to phase out at $81,000 for single filers covered by a plan. For married couples filing jointly, the phaseout starts at $129,000 if both spouses are covered, and at $242,000 if only one spouse is covered.

The employee deferral limit for 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan is $23,500 for 2025, with no projections released yet for 2026.

Estate and Gift Taxes

The estate and gift tax exclusion is $13.61 million per individual for 2025 and will rise to $15 million in 2026 under OBBBA. The annual gift exclusion is $19,000 for both 2025 and 2026, with no increase projected until 2027.

Other Provisions

The foreign earned income exclusion (FEIE) is projected at $132,900 for 2026, up from $130,000 in 2025. This generally applies to U.S. citizens who live abroad; they may exclude foreign earnings up to this limit. The exclusion amount is adjusted each year for inflation.

The student loan interest deduction allows up to $2,500 of interest to be deducted each year. For 2026, the deduction phases out for married couples filing jointly with modified adjusted gross income above $175,000, compared with $170,000 in 2025. For single filers, the phaseout remains at $85,000.

The adoption credit is projected at $17,600 for 2026, up from $17,280 in 2025.

Tax Planning Opportunities 

Although the IRS has not yet finalized 2026 tax figures, the current projections give individuals a chance to plan ahead. Even small changes to brackets, deductions, or contribution limits may create opportunities to adjust strategies before year-end.

For example, choosing whether to take a year-end bonus in December or January could affect total tax liability. The marginal rate might stay the same, but that extra income could interact with deduction phaseouts, credit thresholds, or AMT exposure in ways that change the outcome. The same is true for charitable giving or large deductions.

Contact Us

These figures aren’t finalized by the IRS; however, they provide a useful starting point for year-end planning. Taking time now to review thresholds, evaluate strategies, and prepare for potential changes can help taxpayers stay ahead. If you have questions about the information outlined above or need assistance with another tax or accounting issue, WhippleWood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.

This article is for information purposes only and does not constitute tax advice.