As you and your family fully settle into 2026, now is the perfect time to review important financial matters. Recent legislative changes, including the One Big Beautiful Bill Act signed last July, have reshaped the tax landscape—particularly for estate planning and charitable giving.
Below are the key areas to focus on to avoid surprises during this tax season and beyond.
1. Review Your Tax Withholding & Retirement Contributions
Inflation adjustments have pushed retirement limits higher for 2026. Ensure your withholdings and contributions align with these new figures:
- 401(k)/403(b) Limits: $24,500 (up from $23,500 in 2025).
- IRA Contribution Limits: $7,500 (up from $7,000 in 2025).
- Catch-up Contributions (50+): $8,000 for 401(k)s and $1,100 for IRAs.
- Special Catch-up (Ages 60–63): The “super catch-up” remains at $11,250 for eligible workplace plans.
Crucial 2026 Update: Under the SECURE Act 2.0, if you earned more than $150,000 in 2025, your age-50+ catch-up contributions must now be made to a Roth (after-tax) account. Pre-tax catch-ups are no longer permitted for high earners.
2. Gather & Organize Your Tax Documents
Avoid last-minute stress by designating a secure location for the following 2025 tax-year documents (which you are filing now):
- Income Forms: W-2s, 1099s, and K-1s.
- Business Filings: Forms 1120-S or 1065.
- Itemization Support: Charitable receipts, medical expenses, and mortgage interest.
Standard Deduction for 2026: If you are planning for next year’s filing, note that the standard deduction has increased to $16,100 (Single) and $32,200 (Married Filing Jointly).
3. Plan Your Gifting & Charitable Contributions
The 2026 legislative landscape has significantly changed the “sunset” many feared in previous years.
- Annual Gift Exclusion: Remains at $19,000 per person ($38,000 per couple).
- Lifetime Estate Tax Exemption: Previously scheduled to drop by half, new law has instead increased it to $15,000,000 per person for 2026. This provides a renewed window for high-net-worth families to utilize trusts like SLATs without the immediate fear of a declining exemption.
- Qualified Charitable Distributions (QCDs): The maximum annual amount is now $111,000 per person.
- New Non-Itemizer Deduction: Even if you take the standard deduction, you can now deduct up to $1,000 ($2,000 for couples) in cash donations to qualified charities.
4. Life Changes and Considerations in 2026
Your financial plan should evolve alongside your life. Please update us on any major shifts, such as:
- Real Estate: Impact of recent rate changes on purchases or sales.
- Family Growth: Setting up 529 plans or updating beneficiary designations.
- Career Moves: Navigating the new Roth catch-up mandates if your income has crossed the $150,000 threshold.
- Philanthropy: Reviewing whether the new “0.5% of AGI floor” for itemized charitable deductions affects your giving strategy.
As always, we are here to help. Please reach out with any questions regarding these new limits or how the latest legislation affects your specific goals.
Your Bridgewater Advisors Team
