With key tax thresholds, deductions, Social Security rules, and Medicare premiums set to shift in 2026, this guide breaks down what investors need to know—and how to plan ahead with clarity and purpose.
The 2026 tax landscape is shaping up to be a busy one. Rates are not changing, but the income thresholds, deductions, Social Security rules, Medicare premiums, and estate tax limits absolutely are. Below is a clear breakdown of the numbers that matter most so you can plan with intention.
The seven bracket system stays put. What changes are the income thresholds.
With higher bracket thresholds, you have a bit more space to manage income before hitting the top rates. This helps with timing Roth conversions, harvesting capital gains, exercising options, and planning business income.
The standard deduction rises again in 2026.
Adults who are age 65 or older can add another $1,650 per person.
There is also a separate senior deduction of $6,000 that may apply even if you itemize.
If you normally itemize, these higher thresholds make it more appealing to concentrate charitable gifts into one year. You might use a donor-advised fund to bundle multiple years of giving, then claim the large deduction once and take the standard deduction in the off years.
Here are the updated savings limits.
This raises the total potential employee contribution to $35,750 during those four years.
More tax-advantaged room means more opportunity to shift money away from taxable accounts. For high earners, the bigger strategic question is not whether to contribute but whether contributions should be pretax or Roth.
Benefits are projected to increase by 2.8% in 2026.
For the average retiree, that is an increase of roughly $56 per month.
The taxable wage base rises from $176,100 in 2025 to $184,500 in 2026.
The Social Security tax rate stays the same at 6.2% for employees and employers. The Medicare tax continues with no cap.
If you manage your own compensation or bonuses, the wage base matters when deciding how to time income at year-end.
This one matters because many retirees assume Social Security is tax-free. In reality, the IRS uses a calculation called provisional income to determine how much of your benefit is taxable.
Provisional income includes:
The thresholds remain the same for 2026.
Most high-net-worth households will land in the 85% zone. It is not 85% tax, just 85% of the benefit being treated as taxable income at your marginal rate.
The first IRMAA tier begins when your 2024 modified adjusted gross income exceeds:
Surcharges can raise Part B premiums by $81 to $487 per month per person depending on how far above the threshold your income lands.
Part D includes additional IRMAA surcharges as well.
There is now a $2,100 annual limit on Part D out-of-pocket drug costs.
Medicare uses your tax return from two years prior. That means your 2024 income sets your 2026 premiums. Large capital gains, Roth conversions, business sales, and portfolio withdrawals all influence IRMAA tiers.
The estate tax rate above the exemption remains 40%.
This is prime time to evaluate wealth-transfer strategies.
These numbers matter most when you coordinate them. Income taxes, Medicare premiums, Social Security timing, charitable strategies, estate planning, and portfolio withdrawals all interact.
If you want help mapping out what your 2026 tax picture could look like in real $, your Allworth financial advisor can build a personalized strategy. A few smart moves now can set you up for much cleaner tax years ahead.
This information is meant for educational purposes and not as direct tax or legal advice. Rules and regulations can shift anytime, so it’s always best to consult a qualified tax advisor, CPA, or attorney for guidance tailored to your specific situation.
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