Key Inflation-Adjusted Tax Amounts for 2026: Brackets, Deductions, and Limits

The IRS adjusts dozens of tax thresholds each year for inflation: income tax brackets, retirement contribution limits, gift tax exclusion, standard deduction, HSA limits, Section 179 expensing, Social Security wage base, and many more. Knowing the current-year numbers is the difference between planning and guessing. Here are the key 2026 inflation-adjusted tax amounts for small business owners and individuals.

The IRS publishes annual figures in late fall (typically October-November) for the following year via Revenue Procedure. Social Security amounts are published separately by the SSA. We aggregate the key items below for 2025 (last confirmed annual cycle); 2026 numbers track via the same IRS/SSA notices — confirm current-year figures at irs.gov and ssa.gov.

What are the 2026 federal income tax brackets?

For 2025 (most recently confirmed brackets), federal income tax brackets for single filers run from 10% on income up to $11,925 to 37% on income over $626,350. For married filing jointly, the top 37% bracket starts at $751,600.

• 10%: $0–$11,925 single / $0–$23,850 MFJ
• 12%: $11,925–$48,475 single / $23,850–$96,950 MFJ
• 22%: $48,475–$103,350 single / $96,950–$206,700 MFJ
• 24%: $103,350–$197,300 single / $206,700–$394,600 MFJ
• 32%: $197,300–$250,525 single / $394,600–$501,050 MFJ
• 35%: $250,525–$626,350 single / $501,050–$751,600 MFJ
• 37%: over $626,350 single / over $751,600 MFJ

2026 brackets adjust upward for inflation (typically 2-3% on each threshold). Confirm at irs.gov.

What is the 2026 standard deduction?

The 2025 standard deduction is $15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household. The 2026 figures are indexed for inflation.

Additional standard deduction for age 65+ or blind: $2,000 single / $1,600 each for married filers in 2025. These stack — a married couple where both are 65+ gets an extra $3,200 on top of the $30,000 base.

For most small business owners, the standard deduction wins versus itemizing unless you have significant mortgage interest, state taxes (capped at $10,000), or charitable contributions. Bunching itemized deductions into alternating tax years can re-enable the itemized strategy.

What are the 2026 retirement plan contribution limits?

Key 2025 contribution limits (2026 figures announced via IRS Notice in late 2025):

• IRA (Traditional / Roth): $7,000 ($8,000 if age 50+)
• 401(k) employee deferral: $23,500 ($31,000 with age 50+ catch-up; $34,750 with SECURE 2.0 catch-up for ages 60-63)
• 401(k) combined cap (employee + employer): $70,000 ($77,500 with age 50+ catch-up)
• SEP-IRA: Up to 25% of net SE earnings, capped at $70,000
• SIMPLE IRA: $16,500 ($20,000 with age 50+ catch-up)
• HSA: $4,300 self-only / $8,550 family ($1,000 catch-up for age 55+)

For deeper retirement plan strategy, see our retirement plans and IRAs tax guide for small business owners.

What is the 2026 Social Security wage base?

The Social Security wage base — the maximum earnings subject to the 12.4% Social Security portion of FICA — was $176,100 for 2025 (up from $168,600 in 2024). For 2026, the SSA announces the wage base each October. Track at ssa.gov.

What this means for small business owners:

• Employees pay 6.2% Social Security on wages up to the wage base; employers match with another 6.2%. Total 12.4% on the first $176,100 of wages in 2025.
• Self-employed individuals pay both halves (12.4% Social Security plus 2.9% Medicare = 15.3% self-employment tax) on net SE earnings up to the wage base, plus 2.9% Medicare on all earnings above.
• High earners over $200,000 single / $250,000 MFJ also pay an additional 0.9% Medicare surtax on the excess.
• The Social Security portion has a ceiling; the Medicare portion does not.

For S-Corp owner-operators, the wage base is a key planning lever: paying yourself a W-2 salary at or just above the Social Security wage base maximizes the “credit” toward your future Social Security benefit while keeping additional income as distributions (not subject to Social Security tax).

What is the 2026 estate and gift tax exemption?

The 2025 federal estate tax exemption is $13.99 million per individual ($27.98 million for a married couple with portability). The 2025 annual gift tax exclusion is $19,000 per recipient per year (up from $18,000 in 2024). 2026 figures index for inflation.

Critical 2026 note: the elevated estate exemption under the 2017 Tax Cuts and Jobs Act is scheduled to sunset at the end of 2025, returning to roughly $6-7 million per individual unless Congress extends. For high-net-worth families, the next 12 months represent the last guaranteed window to use the higher exemption. See our estate planning tax guide for the framework.

What is the 2026 Section 179 expensing limit?

The 2025 Section 179 expensing limit is $1,250,000 with a phase-out beginning at $3,130,000 of property placed in service. Beyond Section 179, bonus depreciation continues to phase down (60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027 unless Congress acts).

For small business owners buying equipment, vehicles over 6,000 lb gross vehicle weight, or other qualifying property, Section 179 + bonus depreciation can fully expense the purchase in the year of placement. The math matters most for businesses with materially fluctuating income — accelerated depreciation is more valuable in high-income years.

What are the 2026 long-term capital gains tax brackets?

For 2025, long-term capital gains and qualified dividend rates are:

• 0%: taxable income up to $48,350 single / $96,700 MFJ
• 15%: taxable income $48,350–$533,400 single / $96,700–$600,050 MFJ
• 20%: taxable income over $533,400 single / over $600,050 MFJ
• Plus 3.8% Net Investment Income Tax (NIIT) on investment income above $200K single / $250K MFJ thresholds

The 0% bracket is the most underused planning lever. Retirees and lower-income business owners can realize substantial long-term capital gains tax-free by managing total income to stay within the 0% bracket. Combined with the standard deduction, a married couple with no other income can realize up to about $126,000 of long-term capital gains in 2025 at the federal 0% rate.

What is the 2026 SE tax rate and threshold?

The self-employment tax rate is 15.3% (12.4% Social Security + 2.9% Medicare), applied to 92.35% of net SE earnings. Social Security portion (12.4%) applies only up to the wage base ($176,100 in 2025). Medicare portion (2.9%) has no ceiling.

SE tax applies to anyone with net SE earnings of $400 or more in the year. Half of the SE tax is deductible above the line on Form 1040. For deeper SE tax planning, see our self-employment tax guide for small business owners.

Until next time.

Common Questions

What is the 2026 Social Security wage base?

The Social Security wage base — the maximum earnings subject to the 12.4% Social Security portion of FICA — was $176,100 for 2025 (up from $168,600 in 2024). The 2026 figure is announced by the SSA each October. Confirm at ssa.gov.

What are the 2026 federal income tax brackets?

For 2025, federal income tax brackets run from 10% on income up to $11,925 (single) to 37% on income over $626,350 (single) / $751,600 (MFJ). 2026 brackets adjust upward 2-3% for inflation. The 22% and 24% middle brackets cover most small business owner households filing jointly between $96,950 and $394,600.

What is the 2026 standard deduction?

The 2025 standard deduction is $15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household. Additional $2,000 (single) / $1,600 each (married) for age 65+ or blind. 2026 figures are indexed for inflation.

What are the 2026 long-term capital gains tax rates?

For 2025, long-term capital gains rates are 0% (taxable income up to $48,350 single / $96,700 MFJ), 15% (up to $533,400 single / $600,050 MFJ), and 20% above. Plus 3.8% Net Investment Income Tax on investment income above $200K single / $250K MFJ. The 0% bracket is the most underused planning lever for retirees and lower-income business owners.

What is the 2026 Section 179 expensing limit?

The 2025 Section 179 limit is $1,250,000 with a phase-out beginning at $3,130,000 of property placed in service. Bonus depreciation continues phasing down: 40% in 2025, 20% in 2026, 0% in 2027 unless Congress extends. For equipment purchases by small business owners, Section 179 plus the remaining bonus depreciation can fully expense most qualifying property.

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