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New 2026 Tax Brackets, Standard Deductions & More! · Retirement Answers

• 0:00
  Jacob Duke: Hey, friends, and welcome back to another episode of Retirement Answers. My name is Jacob Duke. I'm your host as always. Today on the show, I wanna make you aware of all of the important numbers changes here in 2026. We're gonna be talking about your federal income tax brackets, standard deductions, capital gains rates, retirement contribution limits, Medicare premium thresholds, and several other important planning numbers that you need to know about here in 2026.
• 0:25
  But be sure to stay to the end because I'm gonna tell you about one important tax threshold that is not updated in 2026 and why this is a really bad thing for retirees or will continue to be a bad thing for retirees moving forward. But before we jump in, thanks for tuning into this episode. I hope you continue to find The Retirement Answers podcast valuable. And if you do, I'd love to have a rating and review there on Apple Podcasts or Spotify if you feel led. But then also, I'd love for you to share with a friend who could benefit from these same conversations.
• 0:53
  Now, one thing I do wanna mention is if you want a copy of this important numbers data sheet that I'm gonna be going through here today, you can have it for yourself completely free. All you have to do is click on the link in the description or in the show notes here, and you can grab it. It'll take you to the website, type your email in, we'll shoot it straight over to you. It's completely free, no strings attached, It's for you to use throughout the entire year of 2026. It's super handy to have something like this with all the important data points and numbers that you need to know in one spot.
• 1:21
  So with that, let's just go ahead and jump right in. So the first thing to know here in 2026 are the federal income tax brackets and how they've adjusted slightly upwards. So really quickly for married filing jointly, I'm just gonna use round numbers and you can look at the the detailed amounts on your actual data sheet that you're gonna get. But, the round numbers here are the first 10% bracket that's for married filing jointly goes from zero to about 25,000, the 12% from 25 to a 22% from 100 up to two eleven, and then 24% from two eleven to four zero three, and so on. And then for single filers, it's exactly half of that.
• 1:55
  K. The 10% bracket is from zero to 12,400. The 12% bracket is from 12,400 up to 50,000. 22 is from 50 to one zero five. 224% is from the one zero five up to two zero one.
• 2:07
  So that's the federal income tax brackets. Now what about standard deductions? Okay. So here in 2026, the standard deduction has actually increased again slightly and under the one big beautiful bill has also been made permanent like we saw back in July 2025. But for married filing jointly, the standard deduction in 2026 is $32,200.
• 2:26
  For single filers, it is 16,100. And for the additional catch up there for folks who are 65 or older or are blind, for married folks, each eligible spouse is able to get $1,650, okay, of additional standard deduction. And if you are unmarried, whether you're single or head of household, your additional deduction is $2,050. And again, don't forget about the new additional extra extra deduction for those of you who are 65 plus by the end of the calendar year. For each eligible person, it is $6,000 of additional deduction, and these are non itemized below the line deductions.
• 3:08
  Okay? So you can get that whether you itemize or not, but the key there is is your income has to be under a certain amount in order to qualify for the full $6,000 deduction. So for single filers, and this is on the data sheet, but for single filers, 75,000 to $1.75, that's the income phase out range, and this is your modified adjusted gross income, your top, top, top income number before deductions, before anything else, this is what you've got to pay attention to. But if you're a single filer and you're 65 plus, as soon as you go over that $75,000 modified adjusted gross income number, your $6,000 deduction would start to decline over that course of that phase out range from 75 up to $1.75. If you're single and you're filing single and you're 65 plus trying to get this extra deduction, you will not get it if you make more than $1.75 or have more than $1.75 show up on your modified adjusted gross income.
• 4:02
  If you're married filing jointly, that phase out ranges 150,000 up to $2.50. So if you have less than 150,000 of a modified adjusted gross income as married filing jointly, you and your spouse, assuming both of you are 65 or older, would qualify for the full $6,000 additional senior deduction. As soon as you go over $1.50, your $6,000 each, that would start getting reduced, that would start getting reduced accordingly based on how much income you have there between 150 and then $2.50. As soon as you're over two fifty, it goes away completely. And so that's pretty much everything that's normal, I guess, for an everyday American to know on deductions and the federal ordinary income tax brackets, but I want to focus really quickly on the long term capital gain bracket and how that is important or plays into your decisions, especially in retirement around tax gain harvesting.
• 4:51
  So for married filing jointly folks out there, the 0% long term capital gain bracket is from zero to $98,900 taxable income. Okay. So that's not quite exactly aligned with the top of the 12% bracket, but it's about $2,000 less, so just under, which is very close. The 15% rate for married filing jointly goes from 98,901 all the way up to 613,000. If you've got taxable income above $6.13, you will have a 20% capital gain rate.
• 5:23
  And for single filers, it is exactly half of that, but the 0% rate for long term capital gains for single folks goes up to, $49,004.50, and then the 15% rate goes from $49,004.50 up to $5.45. Above that, it goes to 20%. Again, you can see all those numbers there. But this is important to know as you're realizing capital gains, whether it be selling a rental property, whether it be selling something in your brokerage account, whether it be qualified dividends. Okay?
• 5:48
  If you have income low enough, you could qualify for that 0% long term rate, which I'm a huge fan of. It's one of my favorite tax planning strategies for retirees. I've done episodes on it. So if you wanna check those out, I'm gonna try to have that linked in the description below for you, so you can go take a listen to that if you haven't heard me talk about tax gain harvesting. But using those brackets wisely, especially early in retirement, as you're thinking about where to pull money from and how you should structure your income, and should I do Roth conversions or not, or how do I stay under a certain amount of income for ACA subsidies if you're before 65?
• 6:23
  All of these questions, they tie into this your tax planning conversations and where your income comes from. So that long term capital gains bracket is one of my favorite things to look at and use if we can, but that's something to pay attention to here in 2026 as well. Now moving on to how much you can actually save and contribute to your different retirement accounts. I actually just did an episode on this. If you were able to listen to it, it was actually talking about the new changes to catch up contribution specifically here in 2026 and beyond if you are 50 or older and maybe make too much money.
• 6:55
  I'm not gonna dive into that specifically here today because I did a full episode on it, and it came out yesterday, I believe. So you can go check that out if you have not listened to that yet, but here are a few important numbers to know regarding contribution limits. For the retirement plan, so think four zero one K, four zero three b, four fifty seven, the contribution limit here in 2026 is 24,500. The catch up contribution for those of you who are 50 or older is $8,000. Now remember, the, there's actually a super catch up for anyone who is 60 to 63, and that actually is 11,250.
• 7:29
  So if you're above 50 years old, you get the $8,000 But if you're between ages 60, 61, 62, and 63, by the end of the calendar year, you would actually get an additional $3,250 of room to make catch ups with here in 2026. So that is the employer plans. Now for your traditional IRAs and Roth IRAs, the new contribution limits are $7,500 for the normal contribution limit here in 2026, and the catch up for those of you who are 50 or older is $1,100. So $8,600, that's how much you can contribute to a Roth IRA or a traditional IRA in 2026 without going above the limits. Now there are a few important things to know here on Roth IRA eligibility and traditional IRA deductibility.
• 8:16
  I'll dive into that right now because it is important to take into consideration. Now, if you are single, okay, the phase out range for Roth eligibility, meaning you're able to contribute directly to a Roth IRA with no questions, is 153,000. If you're under that amount of modified adjusted gross income, you can contribute as a single filer directly to your Roth IRA without having to do a backdoor Roth. Now if you have between $1.50 and one 68, you can contribute some money, that's the phase out range, okay, to your Roth IRA directly. As soon as you're over one sixty eight as a single filer, you have to do a backdoor Roth in order to get money into a Roth IRA.
• 8:55
  You cannot contribute directly to a Roth if you earn more than that as a single filer. Now for married filing jointly, the phase out ranges are a lot higher. It's $242,000. That's the new number to pay attention to if you're married filing jointly here in 2026. If your modified adjusted gross income is lower than $2.42, you can contribute directly to a Roth IRA without having to do the backdoor Roth mechanism.
• 9:19
  If you have from $2.42 to $2.52, somewhere in that range, that's the phase out range, then you would get some portion of the annual maximum. If you're above $2.52, you cannot make a direct contribution to a Roth. Now I'm not gonna talk about backdoor Roths right now because I've done episodes on that. Again, I'll try to have that linked in the description below for you, where I go in-depth on some of the things to know there, some of the nuances, and maybe some of the pitfalls to look out for if you are planning on doing a backdoor Roth here in 2026. But those are the limits.
• 9:46
  Those are the eligibility requirements for Roth eligibility. And then the next thing I wanted to tell you here is actually traditional IRA deductibility here in 2026. This is something a lot of people aren't really aware of, but if you add money or contribute money to a traditional IRA, you might not be able to deduct that money. A lot of people think it's an automatic deduction. Not quite true.
• 10:07
  If you are covered by a work plan, such as a four zero one ks, four zero three b, four fifty seven, you actually might be making too much money to deduct your traditional IRA contribution. So for single filers, okay, with a modified adjusted gross income of less than $81,000 and if you're covered by a work plan, so you're able to put money into a four zero one k at work. If you make less than 81,000, you can also deduct your contributions to a traditional IRA. As soon as you go from 81 to 91, that's the phase out range. But if you're above $90,000 as a single filer, guess what?
• 10:42
  You cannot deduct your traditional IRA contributions even though the traditional IRA is designed to be a tax deferred account. Okay? So you would have to put after tax money into that particular account, and I'd likely not recommend it unless you plan on doing the backdoor Roth and getting it over to the Roth, you know, immediately. Now for married filing jointly folks, the phase out range, is from 129 to 149. So that means that if you are married filing jointly and you, okay, you are the one covered by an employer plan.
• 11:12
  Now the word covered there, that's important. Okay? Because whether or not you're actually contributing to the plan or not, that's not what it's saying. It's basically if you are eligible to contribute to the plan. Alright?
• 11:24
  So if you are married filing jointly and eligible to contribute to a four zero one k four zero three b four fifty seven, your total income as the household cannot be north of $1.29 all the way up to $1.49. That's the phase out range. But if you make more than one twenty nine married filing jointly and you have the work plan available to you, then you cannot deduct your traditional IRA contributions at all if you go above $1.49. Now if you are married filing jointly and only your spouse is covered, meaning you are the person that's not covered, this is an example of, let's say, you know, you've got someone at work and the other person's a homemaker, they're not working nor they're covered by an employer plan, technically, okay, the limit here is actually increased for that particular spouse in in the the relationship to where, the limit is then two forty two up to two fifty two. That's the phase out range, but if you're not covered by a work plan, you actually have up to $2.42 of total modified adjusted gross income.
• 12:20
  That's the limit before you would have to, you know, stop deducting any of your traditional IRA contributions. So that's always a really weird one for people to kinda learn and discover. It's like, have I been doing this right? I don't know. So if that's of question to you, feel free to reach out to me.
• 12:34
  Happy to to clarify that further, but all of those things are there on the data sheet. So check that out if that's important to you. Now, before we get into the IRMA Sur charges and Medicare brackets and all that, wanted to really quickly hit on HSAs. So here in 2026, as an individual, you can contribute $4,400 to an HSA. For a family, you can do $8,750, and then if you're 55 plus, you could do the catch up of 1,000.
• 13:02
  So that's the new updated limits there for HSAs here in 2026. Now for Medicare brackets. Okay. This is gonna be important for those of you who are 65 and you're actually paying Medicare premiums, and you're like, ah, am I gonna be paying IRMA surcharges or not? Well, here in 2026, remember, this is always looking back to tax years.
• 13:25
  So really it's based on what you earned in 2024 and what shows up on your tax return then. That's what these brackets are referring to. But in 2026, if your modified adjusted gross income back in 2024 for a married filing jointly couple was $218,000 or less, you do not pay any surcharges on your Part B or Part D premiums. Okay? If you were single, it's 109,000 or less.
• 13:48
  That's what you gotta be under two years ago in order to not pay any surcharges. Now, as soon as you go over that, what I wanna do is kinda call out the ranges here for married filing jointly, and then I want to actually share what the increase or the surcharge is. But for married filing jointly, it's from $2.18 up to $2.74, and then for single folks, it's from $1.00 9 up to, $137,000. Now that's the the range there that your modified adjusted gross income. If it fell in that range, your Part B premium would be increased by $81.20.
• 14:20
  Your Part D premium would be increased by $14.50. And so I'm not gonna keep going through the thresholds here because you can see that on the data sheet, so be sure to grab it. But this stuff is so important to know as you're building out your plan in terms of where your income comes from and knowing what you can and can't take from different places to stay under these thresholds. Or maybe you say, hey, Jacob, I'm willing to pay the $81.20 additional amount on my part b to go up and do Roth conversions up to $2.74. Great.
• 14:46
  Right? So at least you want to know about what you're paying and why you're paying it. Now here's the hard part as you're doing your planning. Okay? Remember, these brackets that I'm calling out to you, technically, these are the brackets here in 2026 that apply to your income from 2024, And what you can expect is actually your income this year, okay, whatever you earned this year, that would be based on the new updated brackets when you get to 2028.
• 15:13
  Okay? So you can't be exact whenever you're looking at IRMA surcharges and your income. You'll never be able to get it exactly right because you won't know what the new thresholds are and the new brackets are until you get to that year, two years down the road. So here's what I can say, is if you base your Roth conversion decisions and your income planning decisions off of the current brackets in this year, you know that you would be lower, the brackets would be lower than whatever they will be in two years. Does that make sense?
• 15:45
  So if you do your planning off of this year's brackets, okay, and you say, don't want do Roth conversions. I'm married, finally, and I don't want do anything above 02/18 just to make sure I don't have any surcharges in two years. Guess what? The bracket might be 02/20 or 02/25 when you get to 2028, but at least if you did 02/18, you're under that bracket. So that's one sure way to be under the bracket, again, that it increases every year, which it does.
• 16:08
  So, just wanted to kinda talk through that really quickly there on the surcharges. Now for the thing that is not updating here in 2026, and in fact, has not updated since the beginning, is going to be your provisional income tax brackets for Social Security taxation. Now, this is an interesting one. Okay? So since Social Security taxation became a thing, the brackets to determine how much of your Social Security benefits are taxable, those brackets have not changed.
• 16:41
  K? They've not increased. They've not inflated over time. They've not adjusted upwards. They have been stationary.
• 16:47
  They've been locked in. And this is weird because everything else adjusts, right, except this one thing and maybe a couple others, but this one thing is actually really odd because your benefits are actually going up based on a COLA every year, a cost of living adjustment. But your provisional income brackets that determine how much of those increasing benefits are taxable, those are not going up with it. Those are staying the same. Okay?
• 17:12
  So, what's important to know here is that at some point, unless this has changed or redone to where these brackets actually go up, you're gonna have more and more and more of your Social Security benefits taxed every single year because your benefits are going up, right, which get calculated and added into how you calculate how much is actually taxable, but the brackets to figure that out are not going up. So a lot of people are not aware that Social Security is taxable or is not taxable or how it's even calculated. I've done so many episodes on that, and I've done YouTube videos on that, so I'll try to have some of that linked below as well for you to go check out. But the thing to know here with Social Security taxation is that, right now anyway, if Social Security is your only form of income, regardless if you're married filing jointly or single filer or get both get the max benefits, like, no matter which way you slice it, if it's if it's your only form of income and you have nothing else, no interest, no dividends, no nothing, you're not gonna pay any taxes on any of those benefits.
• 18:12
  Okay? It's when you start adding other forms of income, whether it be earned income, IRA distributions, dividends, interests, you know, whatever it is, as soon as you start adding other forms of income to it, right, that's whenever more and more of your Social Security could become taxable up to a maximum of 85% of your benefits could be subject to taxation. So what's important to know is that anywhere from 0% of your benefits all the way up to 85% of your benefits could be taxed, but it's really reliant on your other forms of income. I'm not gonna go through the calculation today. I've done that in other episodes.
• 18:49
  Again, I'll try to have those linked below. But really quickly, those provisional income brackets for married filing jointly are zero to 30 2,000, 32,000 to 44, and then 44 or more. And then for single filers, it is zero to 25,000, 25 to 34, and then above 34,000. So again, you can look that on your data sheet when you grab it, and there's a lot that kinda goes into what that those numbers are really telling us, and I'm not gonna jump into that today, and I'll have those other episodes linked below for you. But, these are the changes that are important to most pre retirees and retirees as you jump into 2026, whether you're still saving or actually starting to take money out.
• 19:25
  But it's important to know all the stuff so you can make better decisions and plan smarter here in 2026. So hope this was helpful. If it was, shoot it over to a friend and tell them to grab their free copy of the important numbers data sheet as well. Thanks very much for tuning in. We will talk to you again very soon.
• 19:41
  Hey, it's Jacob again, and I wanted to remind you that nothing discussed in today's episode is meant to be financial, legal, or tax advice. Retirement Answers is for educational purposes only. Thanks for tuning into this week's episode. I look forward to talking with you again next week.