2026 IRS Inflation Adjustments for Individual Taxpayers

The IRS has announced the annual inflation adjustments for more than 60 tax provisions for tax year 2026. This includes updates to tax rate schedules and other tax changes, as detailed in Revenue Procedure 2025-32 :

• The 2026 Standard Deduction has increased and is shown in the chart below.
• The maximum Child Tax Credit is $2,300, with the refundable portion remaining at $1,800.
• The annual gift exclusion is $19,000 (unchanged from 2025).
• The Unified Credit Against Estate Tax for a decedent passing away in 2026 is $15,000,000 (up from $13,990,000, an increase of $1,010,000).

Also adjusted are the tax brackets for 2026, with the highest marginal rate at 37%, outlined below:

2026 Inflation Adjustments for Retirement

By staying informed about the latest inflation figures, it’s possible to estimate the inflation indexing adjustments ahead of the IRS’s usual announcement in November:

• 401(k) employee maximum contribution for 2026 is $24,500 (up from $23,500 in 2025)
  • $8,000 catch-up contribution for taxpayers aged 50 and over (up from $7,500 in 2025)
• IRA contribution limit is $7,500 (up from $7,000 in 2025)
  • $1,100 catch-up contribution for taxpayers aged 50 and over (up from $1,000 in 2025)
• SEP contribution limit of $72,000 (increased from $70,000 in 2025)
• SIMPLE contribution limit of $17,000 for businesses with 25 or more employees (increased from $16,500 in 2025)
  • $4,000 catch up contribution (up from $3,500 in 2025)
• ROTH IRA phase out limits for taxpayer MAGI of:
  • Single/Head of Household: $153,000 to $168,000 (up from $150,000 to $165,000 in 2025)
  • Married Filing Jointly: $242,000 to $252,000 (up from $ 236,000 to $246,000 in 2025)
  • Married Filing Separately: Remains at $0 to $10,000 (not subject to cost-of-living adjustments)

2026 Cost-of-Living Adjustments (COLA) for Social Security

• 2.8 % increase to Social Security and SSI benefits for 2026
• The maximum amount of earnings/wages subject to the Social Security tax (taxable maximum) will increase to $184,500 (up from 176,100 in 2025)
• More of these benefits may be subject to tax because the taxable thresholds are not adjusted for inflation

What These 2026 Inflation Adjustments Mean for You

The IRS’s inflation adjustments for 2026 are more than just numbers—they directly impact how much you keep, save, and potentially pass on to the next generation. Whether you’re planning contributions to retirement accounts, optimizing your tax bracket, or preparing for estate transfers, understanding these thresholds allows for more strategic decision-making.

With the standard deduction and estate tax exemption on the rise, individuals and business owners alike should reevaluate their tax strategies. But with higher taxable thresholds for Social Security and unchanged catch-up contribution limits, there are also new planning challenges to consider.

At Aura Advisors, we believe proactive tax planning is essential, not just for compliance, but for creating long-term financial flexibility. If you’re unsure how these updates might impact your financial picture or want to identify opportunities to reduce tax liability in the years ahead, we’re here to help.

For more reading:

• How OBBBA + Roth Catch-Up Rules Are Rewriting Your 401(k) Playbook

• QSBS Just Got a Makeover: What the OBBBA Means for Startup Investors and Founders

• Section 174 Capitalization Relief Is Here: How the OBBA Affects R&E Tax Strategy

Aura Advisors is a boutique tax consulting and compliance firm working with start-ups, emerging growth companies, and affluent individuals. Making it safer for good people and good companies to continue to do good things.