INTRODUCTION
A number of figures used in the estate, financial, employee benefit, and income-tax planning fields are subject to change or indexed for inflation. The following list is an update of the latest figures available with a brief explanation of their applicability.
The numbers presented are current at the time of its publication. These figures (and discussions thereof) do not take into consideration any proposed or pending legislation.
Many of the annual adjustments to the numbers on these charts are based on the federal cost-of-living index. Because the federal cost-of-living index for the quarter ended September 30, 2025, is much higher than the cost-of-living index for the quarters ended September 30 for the preceding year, some of the limits for 2026 are significantly higher than those for 2025.
Although many proposals to change federal income, estate, and gift tax rules were floated during 2025, to date no substantial new tax legislation has been scheduled to become effective in 2026.
Unless otherwise indicated, all section references are to the Internal Revenue Code.
PENSION BENEFIT GUARANTY CORPORATION
2025 | 2026 | |
Maximum Monthly Guaranteed Benefit | $7,431.82 | $7,789.77 |
Flat Premium Rate | $106 | $111 |
The maximum monthly benefit above reflects a single, straight life at age 65 payout.
IMPORTANT COLAs and SCHEDULED INCREASES
2024 | 2025 | 2026 | |
Limit for Defined Benefit Plans Sec. 415(b)(1)(A). Maximum yearly benefit allowed is the lesser of 100% of the average highest three years’ compensation or the indicated figure. Reductions apply for plans with pre-65 normal retirement ages and for participants with less than ten years of service. | $275,000 | $280,000 | $290,000 (Indexed in $5,000 Increments) |
Limit for Defined Sec. 415(c)(1)(A). Maximum annual addition is lesser of these numbers. | $69,000 or 100% of Compensation | $70,000 or 100% of Compensation | $72,000 or 100% of Compensation (Indexed in $1,000 Increments) |
IMPORTANT COLAs and SCHEDULED INCREASES
2024 | 2025 | 2026 | |
Definition of Key Employee Sec. 416(i)(1)(A)(i). A key employee is one who, during the prior year, was either (a) an officer with compensation in excess of the listed figure, (b) a 5% owner, or (c) a 1% owner with compensation over $150,000. Family attribution rules apply in determining if a person is a 5% owner. | $220,000 | $230,000 | $235,000 (Indexed in $5,000 Increments) |
Annual Limit on Includible Compensation Secs. 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii). This is the maximum amount of compensation that can be taken into account when determining an individual contribution to or benefit under a qualified retirement plan. | $345,000 | $350,000 | $360,000 (Indexed in $5,000 Increments) |
Highly Compensated Employee Sec. 414(q)(1)(B). A highly compensated employee is one who, during the prior year, was either (a) a 5% owner or (b) had compensation above the listed figure. The dollar limitation under Sec. 416(i)(1)(A)(i) concerning definition of key employee in top-heavy plan for 2026 is $235,000. | $155,000 | $160,000 | $160,000 (Indexed in $5,000 Increments) |
Exclusion for Elective Deferrals for a 401(k), 403(b), SARSEP, or Thrift Savings Plan Sec. 402(g). The indicated figure is the maximum salary reduction a participant can make. | $23,000 | $23,500 | $24,500 (Indexed in $500 Increments) |
Age-Based Catchup for a 401(k), 403(b), SARSEP, or Thrift Savings Plan Sec. 414(v)(2)(B)(i). For plan participants age 50 or over. | $7,500 | $7,500 | $8,000 |
Age-Based Catchup for a 401(k), 403(b), SARSEP, Governmental 457(b) or Thrift Savings Plan Sec. 414(v)(2)(B)(i). For plan participants age 60, 61, 62, and 63. | $11,250 | $11,250 |
IMPORTANT COLAs and SCHEDULED INCREASES
2024 | 2025 | 2026 | |
Maximum Elective Deferrals Sec. 408(p)(2)(E). This is the maximum salary reduction a participant can take under a SIMPLE IRA or SIMPLE 401(k). | $16,000 | $16,500 | $17,000 (Indexed in $500 Increments) |
Maximum Elective Deferrals for a SIMPLE Plan with 25 or Fewer Employees Sec. 408(p)(2)(E). This is the maximum salary reduction a participant can take under a SIMPLE IRA or SIMPLE 401(k). | $17,600 | $17,600 | $18,100 |
Maximum 457 Salary Reduction Sec. 457(e)(15). Maximum deferral to nonqualified plans of state and local government and tax-exempt orgs. | $23,000 | $23,500 | $24,500 (Indexed in $500 Increments) |
Part-time Employee Floor for a SEP Sec. 408(k)(2)(C). Employees who earn over the indicated limits must be included in a SEP if they are otherwise eligible. | $750 | $750 | $800 (Indexed in $50 Increments) |
ESOP Maximum Amount Sec. 409(o)(1)(C)(ii). Determining lengthening of five-year distribution period. | $275,000/ $1,380,000 | $280,000/ $1,415,000 | $290,000/ $1,455,000 (Indexed in $5,000 Increments) |
Deductible, Nondeductible, and Roth IRA Contribution Limits Sec. 219(b)(5)(A). This is the limit on how much can be contributed to an IRA. | $7,000 | $7,000 | $7,500 (Indexed in $500 Increments) |
IRA Catch-up Provision for Individuals 50 or Older by Year-End Sec. 219(a)(5)(B)(ii). This is the amount that can be contributed for those 50 and older by year-end. The catchup is $1,100 in 2026. The listed number is the total amount that can be contributed. | $8,000 | $8,000 | $8,600 (Indexed in $500 Increments) |
2026 IRA Phaseout Limits for Active Participants in a Qualified Plan
Modified Adjusted Gross Income (MAGI)
Filing Status | Phaseout of Deduction | 2024 | 2025 | 2026 |
Married filing jointly | Begins | $123,000 | $126,000 | $129,000 |
Ends (i.e., no deduction) | $143,000 | $146,000 | $149,000 | |
Single and HOH | Begins | $77,000 | $79,000 | $81,000 |
Ends | $87,000 | $89,000 | $91,000 | |
Married filing separately | Begins | $0 | $0 | $0 |
Ends | $10,000 | $10,000 | $10,000 | |
Nonparticipant spouse | Begins | $230,000 | $236,000 | $242,000 |
Ends | $240,000 | $246,000 | $252,000 |
What this means: If a single-filing taxpayer participates in a qualified plan at work and earns less than $81,000 in 2026, he may use the full $7,500 IRA deduction. Once he earns more than $81,000, his deduction is phased out until he reaches $91,000, at which point he would no longer be entitled to an IRA deduction.
2026 Roth IRA Phaseout Limits
Modified Adjusted Gross Income (MAGI)
Filing Status | Phaseout of Contribution | 2024 | 2025 | 2026 |
Married filing jointly | Begins | $230,000 | $236,000 | $242,000 |
Ends (i.e., no contribution) | $240,000 | $246,000 | $252,000 | |
Single and HOH | Begins | $146,000 | $150,000 | $153,000 |
Ends | $161,000 | $165,000 | $168,000 | |
Married filing separately | Begins | $0 | $0 | $0 |
Ends | $10,000 | $10,000 | $10,000 |
What this means: If a single-filing taxpayer has MAGI of less than $153,000 in 2026, he may still contribute to a Roth IRA. Once MAGI is more than $153,000, the amount he may contribute decreases until his income reaches $168,000, at which point he would no longer be entitled to make a contribution.
Mandatory Roth Catch-up
SECURE Act 2.0 requires that high earning plan participants make age-based catch ups including age 50 and the enhanced age 60, 61, 62 and 63 catch up to a designated Roth account in 2026 and beyond. In 2026 taxpayers that earned more than $150,000 in wages in 2025 will have to make any age-based catch ups to a designated Roth account.
Qualified Longevity Annuity Contract
SECURE Act 2.0, enacted in December 2022, made some major changes to QLAC rules. In 2022 QLAC contributions were limited to the lesser of $145,000 or 25 percent of the account balance. SECURE Act 2.0 removes the 25 percent limitation. In 2026 QLAC contributions will be limited to $210,000.
2026 SOCIAL SECURITY TAX RATES
2024 | 2025 | 2026 | |
FICA Tax Rate These are the percentages the employer and employee are each taxed for Social Security purposes. | 7.65% for employees 7.65% for employers | 7.65% for employees 7.65% for employers | 7.65% for employees 7.65% for employers |
FICA Tax Rate (Self-Employed) This is the percentage at which a self-employed individual is taxed for Social Security purposes; 12.4% is for Social Security while 2.9% is for Medicare. | 15.3% | 15.3% | 15.3% |
Taxable Wage Base This “earned-income ceiling” is the maximum amount of covered earnings on which Social Security OASDI taxes are paid. | $168,600 | $176,100 | $184,500 |
Medicare Special Wage Base This is the maximum amount of covered earnings on which Social Security hospital insurance taxes are paid. | No Limit | No Limit | No Limit |
Note: The 7.65 percent employee rate is imposed on the taxable wage base of $184,500 in 2026. Earnings in excess of the FICA wage base are assessed on only the Medicare portion of FICA. In 2026, the employee and employer portions of the Medicare assessment are both 1.45 percent. For self-employed taxpayers, the combined tax is 2.9 percent.
High earners pay an additional 0.9 percent of Medicare tax on earnings in excess of the following thresholds:
Threshold Amount | |
Married filing jointly | $250,000 |
Married filing separately | $125,000 |
Other taxpayers | $200,000 |
The 0.9 percent additional tax applies only to the employee contribution to Medicare. For self-employed taxpayers over the threshold, the combined Medicare tax in 2026 is 3.8 percent.
2026 MEDICARE PREMIUMS
2024 | 2025 | 2026 | |
Medicare Part B | |||
Monthly Premium | $174.70 | $185 | $202.90 |
Deductible | $240 | $257 | $283 |
Medicare Part A | |||
Monthly Premium | $505 | $518 | $565 |
Deductible | $1,632 | $1,676 | $1,736 |
Medicare Part B
Medicare Part B enrollees with higher incomes also pay higher Part B premiums based on their incomes. The income-related Part B premiums for 2026 increased to $284.10, $405.80, $527.50, $649.20, or $689.90 depending on the extent to which an individual beneficiary’s income exceeds $109,000 (or a married couple’s income exceeds $218,000).
The highest premium rates are only paid by the less than 1 percent of beneficiaries whose incomes are over $500,000 (or $750,000 for a married couple). A beneficiary who pays the highest income-related premium in 2026 would pay $8,278.80 per year in Part B premiums.
Medicare Part A
Medicare Part A is paid only by individuals who are not otherwise eligible for premium-free hospital insurance and have fewer than 40 quarters of Medicare-covered employment.
The Part A deductible is the beneficiary’s only cost for up to 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay an additional $434 per day for days 61 through 90 in 2026, and $868 per day for hospital stays beyond the ninetieth day for lifetime reserve days. The daily coinsurance for the days 21–100 in a skilled nursing facility will be $217 in 2026.
2026 SOCIAL SECURITY QUALIFICATION
2024 | 2025 | 2026 | |
Social Security Quarterly Earnings (minimum of 40 quarters required) | $1,730 | $1,810 | $1,890 |
2026 SOCIAL SECURITY BENEFITS
Maximum Monthly Benefit (at full retirement age) | $4,152 per Month |
Retirement Earnings Test Exempt Amount (under FRA) One dollar in benefits will be withheld for every two dollars in earnings above the limit prior to reaching FRA. | $24,480 per Year ($2,040 per Month) |
Retirement Earnings Test Exempt Amount for Months Prior to FRA One dollar in benefits will be withheld for every three dollars in earnings above the limit, but only for earnings before the month the taxpayer reaches FRA. There is no annual earnings limit for those who continue to work after reaching their FRA. | $65,160 per Year ($5,430 per Month) |
Substantial Gainful Activity Threshold Limits | |
Nonblind | $1,690 per Month |
Blind | $2,830 per Month |
SSI Federal Payment Amounts | |
Individuals | $994 per Month |
Couples | $1,491 per Month |
SSI Resources Limits | |
Individual | $2,000 |
Couple | $3,000 |
SSI Student Exclusion | |
Monthly | $2,410 |
Annually | $9,730 |
Trial Work Period (TWP) | $1,210 per Month |
Full Retirement Age (FRA): For retirees born between 1943 and 1954, FRA is 66. For those born after 1954 but before 1960, FRA gradually increases to age 67. For those born in 1960 and later, FRA is 67.
Substantial Gainful Activity: To be eligible for disability benefits, a person must be unable to engage in substantial gainful activity, meaning he may not earn more than a certain monthly amount.
2026 INCOME TAX RATE SCHEDULES
BUSINESS INCOME TAX RATES
C CORPORATION INCOME TAX RATES
Entity | Tax |
Corporations | 21% Flat Rate |
Note: Qualified Personal Services Corporations also pay the flat rate of 21 percent on all taxable income.
PASS-THROUGH BUSINESSES
The Tax Cut and Jobs Act creates a 20 percent business income deduction for businesses created as a pass-through entities, including S corporations, partnerships, and proprietorships, if certain conditions are met. The full deduction is available for all pass-through businesses where taxable income is less than $201,750 for a single taxpayer or $403,500 for taxpayers filing joint returns.
The deduction may be limited or eliminated where taxable income is above the thresholds, depending on type of business, owner’s compensation, and depreciable business property.
Business Is Not a Specified Service | Business Is a Specified Service | |
Taxable income less than or equal to $201,750 (single) or $403,500 (joint) | W-2 wage/basis limitations do not apply. Eligible for 20% deduction. | W-2 wage/basis limitations do not apply. Eligible for 20% deduction. |
Taxable income greater than $201,750 (single) or $403,500 (joint) but less than $276,750 (single) or $553,500 (joint) | W-2 wage/basis limitations are phased in over the $75,000/$150,000 range. | Applicable percentage of specified service income is eligible, and W-2 wage/basis limitations are phased in over the $75,000/$150,000 range. |
Taxable income greater than $276,750 (single) or $553,500 (joint) | W-2 wage/basis limitations apply in full. | Specified service income not eligible. |
ESTATES AND TRUSTS
Taxable Income | Tax |
Not over $3,300 | 10% of the taxable income |
Over $3,300 but not over $11,700 | $330 plus 24% of the excess over $3,300 |
Over $11,700 but not over $16,000 | $2,346 plus 35% of the excess over $11,700 |
Over $16,000 | $3,851 plus 37% of the excess over $16,000 |
2026 PERSONAL INCOME TAX RATE SCHEDULES
Married Individuals Filing Joint Returns and surviving spouses
Taxable Income | Tax |
Not over $24,800 | 10% of the taxable income |
Over $24,800 but not over $100,800 | $2,480 plus 12% of the excess over $24,800 |
Over $100,800 but not over $211,400 | $11,600 plus 22% of the excess over $100,800 |
Over $211,400 but not over $403,550 | $35,932 plus 24% of the excess over $211,400 |
Over $403,550 but not over $512,450 | $82,048 plus 32% of the excess over $403,550 |
Over $512,450 but not over $768,700 | $116,896 plus 35% of the excess over $512,450 |
Over $768,700 | $206,583.50 plus 37% of the excess over $768,700 |
Heads of Households
Taxable Income | Tax |
Not over $17,700 | 10% of the taxable income |
Over $17,700 but not over $67,450 | $1,770 plus 12% of the excess over $17,700 |
Over $67,450 but not over $105,700 | $7,740 plus 22% of the excess over $67,450 |
Over $105,700 but not over $201,750 | $16,155 plus 24% of the excess over $105,700 |
Over $201,750 but not over $256,200 | $39,207 plus 32% of the excess over $201,750 |
Over $256,200 but not over $640,600 | $56,631 plus 35% of the excess over $256,200 |
Over $640,600 | $191,171 plus 37% of the excess over $640,600 |
Unmarried Individuals
(other than Surviving Spouse and Heads of Households)
Taxable Income | Tax |
Not over $12,400 | 10% of the taxable income |
Over $12,400 but not over $50,400 | $1,240 plus 12% of the excess over $12,400 |
Over $50,400 but not over $105,700 | $5,800 plus 22% of the excess over $50,400 |
Over $105,700 but not over $201,775 | $17,966 plus 24% of the excess over $105,700 |
Over $201,775 but not over $256,225 | $41,024 plus 32% of the excess over $201,775 |
Over $256,225 but not over $640,600 | $58,448 plus 35% of the excess over $256,225 |
Over $640,600 | $192,979.25 plus 37% of the excess over $640,600 |
Married Individuals Filing Separate Returns
Taxable Income | Tax |
Not over $12,400 | 10% of the taxable income |
Over $12,400 but not over $50,400 | $1,240 plus 12% of the excess over $12,400 |
Over $50,400 but not over $105,700 | $5,800 plus 22% of the excess over $50,400 |
Over $105,700 but not over $201,775 | $17,966 plus 24% of the excess over $105,700 |
Over $201,775 but not over $256,225 | $41,024 plus 32% of the excess over $201,775 |
Over $256,225 but not over $384,350 | $58,448 plus 35% of the excess over $256,225 |
Over $384,350 | $103,291.75 plus 37% of the excess over $384,350 |
2026 QUALIFIED DIVIDEND AND CAPITAL GAINS TAX RATES
Long-term Capital Gains and Qualified Dividend Rates | 2026 |
Taxable income below $49,450 for single filers and married filing separate, joint filers below $98,900, head of household filers below $66,200, and estates below $3,300 | 0% |
Taxable income between $49,450 and $545,500 for single filers, between $49,450 and $306,850 for married filing separate, between $98,900 and $613,700 for joint filers, between $66,200 and $579,600 for head of household filers and between $3,300 and $16,250 for estates | 15% |
Taxable income at or above $545,500 for single filers, at or above $306,850 for married filing separate, at or above $613,700 for joint filers, at or above $579,600 for head of household filers, and at or above $16,250 for estates | 20% |
Note: Because of the 3.8 percent Medicare surtax (discussed immediately following), the effective capital gains rates for taxpayers can reach up to 23.8 percent for taxpayers in the 37 percent income tax bracket, and 18.8 percent for certain taxpayers in lower brackets.
2026 MEDICARE SURTAX
Note: A 3.8 percent surtax applies to the lesser of net investment income or modified adjusted gross income in excess of the following threshold amounts (dependent on filing status).
Filing Status | 2025 | 2026 |
Married individuals filing jointly | $250,000 | $250,000 |
Married filing separately | $125,000 | $125,000 |
Individual taxpayers | $200,000 | $200,000 |
2026 KIDDIE TAX
Note: The Tax Cuts and Jobs Act of 2017 changed the “kiddie tax.” Prior to the TCJA the kiddie tax brought a portion of a child’s unearned income into their parents’ respective tax brackets. The TCJA revamped the “kiddie tax” rules by subjecting a portion of the child’s unearned income to the trust tax brackets. The SECURE Act repealed the TCJA rules and restored the tax at the parent’s rates.
Net Unearned Income | 2025 | 2026 |
Net unearned income subject to the kiddie tax equals unearned income minus the greater of this amount, or | $2,700 | $2,700 |
The child’s itemized deductions (if applicable) plus this amount. | $1,350 | $1,350 |
Eligibility for Parental Election | ||
For parents to elect to include the child’s income on their return, the child’s gross income from interest and dividends must exceed this amount and | $1,350 | $1,350 |
Be less than this amount. | $13,500 | $13,500 |
Impact of Parental Election | ||
Parents who elect to include the child’s income on their return must include in their gross income the child’s gross income minus this amount and | $2,700 | $2,700 |
Must add to their tax the lesser of this amount or | $135 | $135 |
10% of the excess of the child’s gross income over this amount. | $1,350 | $1,350 |
Alternative Minimum Tax Exemption Amount | ||
The AMT exemption for a child subject to the kiddie tax is limited to the sum of the child’s earned income plus this amount. | $9,550 | $9,750 |
Note: Unearned income generally means anything other than wages, salaries, professional fees, or any other amounts received as compensation for personal services actually rendered.
2026 STANDARD DEDUCTION
Basic Standard Deduction | 2025 | 2026 |
Married individuals filing joint returns and surviving spouses | $31,500 | $32,200 |
Heads of household | $23,625 | $24,150 |
Unmarried individuals (other than surviving spouses and heads of households) | $15,750 | $16,100 |
Married individuals filing separate returns | $15,750 | $16,100 |
Additional Standard Deduction for the Aged and the Blind | ||
Unmarried and not surviving spouses | $2,000 | $2,050 |
All others | $1,600 | $1,650 |
Dependents: The standard deduction for a person claimed as a dependent by another is limited to greater of— | ||
(a) Earned income plus this amount or | $450 | $450 |
(b) This amount. | $1,350 | $1,350 |
2026 ADDITIONAL SENIOR DEDUCTION
Note: The OBBBA passed in 2025 created an additional Senior Deduction effective for tax years 2025 through 2028. The deduction is worth up to $6,000 per eligible individual. It is available for taxpayers who are at least 65 by year end. Eligible taxpayers are subject to the following phaseout based upon their MAGI.
Filing Status | Phaseout of Deduction | 2025 | 2026 |
Married filing jointly | Begins Ends (i.e., no deduction) | $150,000 $250,000 | $150,000 $250,000 |
Single, Head of Household, and Married filing separate | Begins Ends | $75,000 $150,000 | $75,000 $150,000 |
2026 ITEMIZED MEDICAL DEDUCTION THRESHOLD
Note: For 2026, only medical expenses in excess of 7.5 percent of AGI for taxpayers of all ages are eligible for an itemized deduction.
2026 CHILD CREDIT AND ADOPTION
2025 | 2026 | |
Threshold Amount: Used in computing the refundable portion of the child credit (this amount is subtracted from earned income; if there is an excess, a percentage of it is added to the overall credit limitation for purposes of computing a hypothetical credit which is used to compute the refundable portion of the child credit). Sec. 24(d)(1)(B)(i). | $1,700 | $1,700 |
Adoption Credit (Sec. 23) | ||
Adoption credit for child with special needs | $17,280 | $17,670 |
Adoption credit for qualified adoption expenses of other children | $17,280 | $17,670 |
Phaseout of adoption credit begins with modified AGI of | $259,190 | $265,080 |
Complete phaseout of adoption credit with modified AGI of | $299,190 | $305,080 |
Exclusion from income in connection with employer-provided assistance in the adoption of child with special needs (Sec. 132) | $17,280 | $17,670 |
Exclusion from income for qualified adoption expenses in connection with employer-provided assistance in the adoption of other children | $17,280 | $17,670 |
Phaseout of exclusion begins with modified AGI of | $259,190 | $265,080 |
Complete phaseout of exclusion with modified AGI of | $299,190 | $305,080 |
2026 Charitable Deductions
The OBBBA introduced some changes to charitable deductions for both itemizers and non-itemizers.
Non-itemizers will have an above the line charitable deduction of $1,000 ($2,000 for joint filers). Only cash contributions will qualify for this deduction. The deduction cannot be claimed for funds given to donor-advised funds or private foundations.
Itemizers will be subject to a .05 percent AGI floor. Contributions below the floor will not be deductible. For example, a taxpayer with a $200,000 AGI and $5,000 in charitable donations will have an AGI floor of $1,000 (200,000 x .0005). Thus only $4,000 of their total contributions will be deductible.
2026 EARNED INCOME CREDIT
Earned Income Credit (Sec. 32) | 2024 | 2025 | 2026 |
Credit denied if investment income exceeds | $11,600 | $11,950 | $12,200 |
Taxpayers with Three or More Children | |||
Earned income amount | $17,400 | $17,880 | $18,290 |
Maximum credit amount | $7,830 | $8,046 | $8,231 |
Threshold phase-out amount: joint returns | $29,640 | $30,470 | $31,160 |
Threshold phase-out amount: other returns | $22,720 | $23,350 | $23,890 |
Completed phase-out amount: joint returns | $66,819 | $68,675 | $70,244 |
Completed phase-out amount: other returns | $59,899 | $61,555 | $62,974 |
Taxpayers with Two Children | |||
Earned income amount | $17,400 | $17,880 | $18,290 |
Maximum credit amount | $6,960 | $7,152 | $7,316 |
Threshold phase-out amount: joint returns | $29,640 | $30,470 | $31,160 |
Threshold phase-out amount: other returns | $22,720 | $23,350 | $23,890 |
Completed phase-out amount: joint returns | $62,688 | $64,430 | $65,899 |
Completed phase-out amount: other returns | $55,768 | $57,310 | $58,629 |
Taxpayers with One Child | |||
Earned income amount | $12,390 | $12,730 | $13,020 |
Maximum credit amount | $4,213 | $4,328 | $4,427 |
Threshold phase-out amount: joint returns | $29,640 | $30,470 | $31,160 |
Threshold phase-out amount: other returns | $22,720 | $23,350 | $23,890 |
Completed phase-out amount: joint returns | $56,004 | $57,554 | $58,863 |
Completed phase-out amount: other returns | $49,084 | $50,434 | $51,593 |
Taxpayers with No Children | |||
Earned income amount | $8,260 | $8,490 | $8,680 |
Maximum credit amount | $632 | $649 | $664 |
Threshold phase-out amount: joint returns | $17,250 | $17,730 | $18,140 |
Threshold phase-out amount: other returns | $10,330 | $10,620 | $10,860 |
Completed phase-out amount: joint returns | $25,511 | $26,214 | $26,820 |
Completed phase-out amount: other returns | $18,591 | $19,104 | $19,540 |
2026 SAVINGS BOND EXCLUSION
Limitation on exclusion of income from U.S. savings bonds for taxpayers who pay qualified higher education expenses (Sec. 135) | 2025 | 2026 |
Married individuals filing joint returns and surviving spouses—threshold amount for beginning phaseout | $149,250 | $152,650 |
Exemption fully phased out | $179,250 | $182,650 |
All others—threshold amount for beginning phaseout | $99,500 | $101,800 |
Exemption fully phased out | $114,500 | $116,800 |
2026 EDUCATION CREDITS and DEDUCTIONS
2025 | 2026 | |
American Opportunity Tax Credit (AOTC) Scholarship credit is 100% for qualified expenses up to: | $2,000 | $2,000 |
AOTC credit is 25% for qualified expenses up to the next: | $2,000 | $2,000 |
Phase-out Floor for Lifetime Learning Credits | ||
Joint returns | $160,000 | $160,000 |
All other returns | $80,000 | $80,000 |
Phase-out Floor for Hope Scholarship Credit | ||
Joint returns | $160,000 | $160,000 |
All other returns | $80,000 | $80,000 |
Maximum Interest Deduction for education loans (Sec. 221) | ||
Married filing jointly | $2,500 | $2,500 |
Reduction begins when adjusted gross income exceeds | $170,000 | $175,000 |
Complete elimination of deduction when AGI exceeds | $200,000 | $205,000 |
All other taxpayers | $2,500 | $2,500 |
Reduction begins when adjusted gross income exceeds | $85,000 | $85,000 |
Complete elimination of deduction when AGI exceeds | $100,000 | $100,000 |
2026 SECTION 179 EXPENSE LIMITS
2024 | 2025 | 2026 | |
Limitation on aggregate cost of Sec. 179 property that taxpayer may elect to expense | $1,220,000 | $2,500,000 | $2,560,000 |
Reduction for Sec. 179 property in excess of this amount | $3,050,000 | $4,000,000 | $4,090,000 |
2026 AUTOMOBILE MILEAGE RATES (CENTS PER MILE)
Purpose | 2024 | 2025 | 2026 |
Standard business use rate | 67 | 70 | 72.5 |
Charitable use rate | 14 | 14 | 14 |
Medical use rate | 22 | 21 | 20.5 |
Moving expense rate | 21 | 21 | 20.5 |
2026 GIFT AND ESTATE PLANNING AMOUNTS
2025 | 2026 | |
Annual Gift Tax Exclusion (Sec. 2503) | $19,000 | $19,000 |
Basic Exclusion Amount for Unified Credit (Sec. 2010) | $13,990,000 | $15,000,000 |
Dollar Amount Used to Compute “2%” Portion of Estate Tax Payable in Installments Calculation (Sec. 6601(j)) | $1,900,000 | $1,940,000 |
Special Use Qualified Real Property Value Reduction Limit (Sec. 2032A) | $1,420,000 | $1,460,000 |
Super Exclusion for Present Interest Gifts from Citizen to Noncitizen Spouses (Secs. 2503 & 2523(i)(2)) | $190,000 | $194,000 |
Notice of Large Gifts from Foreign Persons (Sec. 6039F) | $20,116 | $20,573 |
2026 TRANSPORTATION BENEFITS
Qualified Transportation | 2025 | 2026 |
Monthly exclusion limit for the aggregate of commuter highway vehicle transportation and transit pass | $325 | $340 |
Monthly exclusion limit for qualified parking | $325 | $340 |
Passenger Air Transportation Excise Tax Sec. 4261(b). On amounts paid for each domestic segment of taxable transportation by air. | $5.20 | $5.30 |
Passenger Air Transportation Excise Tax Sec. 4261(c). On amounts paid for international air transportation that begins or ends within the United States (other than Alaska or Hawaii). | $22.90 | $23.40 |
Passenger Air Transportation Excise Tax Sec. 4261(c)(3). On domestic segments that begin or end in Alaska or Hawaii | $11.40 | $11.70 |
2026 INSUBSTANTIAL BENEFITS—CHARITABLE CONTRIBUTIONS
2025 | 2026 | |
Unrelated Trade or Business Exception for Low-cost Articles | $13.60 | $13.90 |
Donor benefit reporting not required if three conditions | ||
(1) Gift to charity is worth at least | $68.00 | $69.50 |
(2) Charity distributes free article not ordered by donor which costs charity no more than | $13.60 | $13.90 |
(3) Benefit received by donor is no more than the lesser of 2% of donor’s contribution, or this amount | $136 | $139 |
Note: Rev. Proc. 90-12, 1990-1 CB 471 provides: “These guidelines describe a safe harbor; depending on the facts in each case, benefits received in connection with contributions may be ‘insubstantial’ even if they do not meet these guidelines.”
Note: A donor must have a written receipt in hand to claim a charitable deduction of $250 or more. That receipt must be in the donor’s possession before the due date for filing his/her income tax return (plus any extensions). If the gift to charity is over $75, and the donor received or became entitled to a tangible benefit, the charity must inform the donor that the deduction is limited to the excess of any money and value of other property received over the value of the goods and services the charity provides. The charity must also provide a good faith estimate of the value of such goods and/or services.
2026 FOREIGN EARNED INCOME
2025 | 2026 | |
Limitation under Sec. 911(b)(2)(D)(i) | $130,000 | $132,900 |
2026 LOBBYING
2025 | 2026 | |
Annual per person, family, or entity dues limitation to qualify for the reporting exception under Sec. 6033(e)(3) (and Sec. 5.05 of Rev. Proc. 98-19, 1998-1 C.B. 547) for certain exempt organizations with nondeductible lobbying expenses. | $143 | $147 |
2026 MEDICAL SAVINGS ACCOUNTS
2025 | 2026 | |
Self-Only Coverage | ||
Annual deductible is not less than | $2,850 | $2,900 |
Annual deductible is not more than | $4,300 | $4,400 |
Annual out-of-pocket expenses (other than premiums) for covered benefits does not exceed | $5,700 | $5,850 |
Family Coverage | ||
Annual deductible is not less than | $5,700 | $5,850 |
Annual deductible is not more than | $8,550 | $8,750 |
Annual out-of-pocket expenses (other than premiums) for covered benefits does not exceed | $10,500 | $10,700 |
2026 HEALTH SAVINGS ACCOUNTS
2025 | 2026 | |
Individual Coverage | ||
Monthly contribution limitation is 1/12 of the lesser of the annual deductible or | $4,300 | $4,400 |
High-deductible health plan deductible is not less than | $1,650 | $1,700 |
High-deductible health plan limit on annual out-of-pocket expenses (other than premiums) | $8,300 | $8,500 |
Family Coverage | ||
Monthly contribution limitation is 1/12 of the lesser of the annual deductible or | $8,550 | $8,750 |
High-deductible health plan deductible is not less than | $3,300 | $3,400 |
High-deductible health plan limit on annual out-of-pocket expenses (other than premiums) | $16,600 | $17,000 |
Additional Contributions for Individuals Age 55 and Older | $1,000 | $1,000 |
2026 LONG-TERM CARE INSURANCE
2025 | 2026 | |
Per-diem limitation for periodic payments received under qualified long-term care insurance contract or life insurance contract periodic payments treated as paid by reason of death of chronically ill individual under Sec. 7702B(d)(4). | $420 | $430 |
Note: The per-diem limitation for periodic payments received under a qualified long-term care insurance or life insurance contract is the amount the insured may exclude from gross income. Sec. 7702B(d)(4); 101(a).
2026 DEDUCTIBLE LONG-TERM CARE PREMIUMS
Attained Age before the Close of the Taxable Year | 2025 | 2026 |
40 or younger | $480 | $500 |
Older than 40 but not older than 50 | $900 | $930 |
Older than 50 but not older than 60 | $1,800 | $1,860 |
Older than 60 but not older than 70 | $4,810 | $4,960 |
Older than 70 | $6,020 | $6,220 |
2026 EXPATRIATION
Note: A covered expatriate is subject to U.S. federal income tax on the net unrealized gain in his or her property as if the property had been sold for its fair market value on the day before the expatriation or termination of U.S. residency. Sec. 877A.
The expatriation tax applies if: | 2025 | 2026 |
(1) The individual’s average annual net income tax for the five-year period preceding the citizenship loss exceeds this amount or | $206,000 | $211,000 |
(2) The individual’s net worth on the date of the citizenship loss equals or exceeds this amount | $2,000,000 | $2,000,000 |
Income Reduction: A covered expatriate’s gross income is reduced by this amount. | $890,000 | $910,000 |