2026 Tax Reference Guide

Federal brackets, contribution limits, IRMAA tiers, ACA cliffs, the OBBBA Senior Bonus, and a step-by-step flow of how every dollar of your income is taxed. All figures updated for the 2026 tax year.

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Federal Income Tax Brackets — 2026

Marginal rates applied to taxable income. Effective rate (Eff.) = total tax ÷ gross income, assuming the standard deduction. Always lower than your marginal rate.

Federal Income Tax Brackets — Single 2026

Rate	Taxable Income	Tax Owed	Eff.*
10%	$0 – $12,400	10% of taxable income	3.6%
12%	$12,401 – $50,400	$1,240 + 12% over $12,400	8.8%
22%	$50,401 – $105,700	$5,800 + 22% over $50,400	14.1%
24%	$105,701 – $201,775	$17,966 + 24% over $105,700	18.5%
32%	$201,776 – $256,225	$41,024 + 32% over $201,775	20.4%
35%	$256,226 – $640,600	$58,448 + 35% over $256,225	23.3%
37%	Over $640,600	$192,979 + 37% over $640,600	25%+

*Eff. rate based on taxable income + $16,100 standard deduction. Example: top of 24% bracket → 18.5% effective rate.

Federal Income Tax Brackets — MFJ 2026

Rate	Taxable Income	Tax Owed	Eff.*
10%	$0 – $24,800	10% of taxable income	4.3%
12%	$24,801 – $100,800	$2,480 + 12% over $24,800	9.5%
22%	$100,801 – $211,400	$11,600 + 22% over $100,800	15.6%
24%	$211,401 – $403,550	$35,932 + 24% over $211,400	20.0%
32%	$403,551 – $512,450	$82,048 + 32% over $403,550	22.4%
35%	$512,451 – $768,700	$116,896 + 35% over $512,450	25.6%
37%	Over $768,700	$206,583 + 37% over $768,700	27%+

*Eff. rate based on taxable income + $32,200 standard deduction. Example: top of 24% bracket → 20.0% effective rate.

FICA & Self-Employment Tax

FICA Taxes — W-2 Employees

Social Security	6.2% — capped at $184,500 wage base
Medicare	1.45% — no wage cap; applies to all wages
Addl. Medicare	0.9% on earned income above $200,000 MAGI0.9% on earned income above $250,000 MAGI (may require estimated payments)

Self-Employment Tax

SE Social Security	12.4% — capped at $184,500 net SE income
SE Medicare	2.9% — no cap; all net SE income
SE Deduction	Deduct 50% of total SE tax from AGI (Schedule 1, line 15)
Addl. Medicare	0.9% on net SE income above $200,000 MAGI0.9% on net SE income above $250,000 MAGI

SE total rate on first $184,500: 15.3%. Above $184,500: 2.9% Medicare only. $100k profit ≈ $14,100 SE tax after the 50% deduction.

Preference Income — LTCG & Qualified Dividends

Applies to assets held 1+ year and qualifying dividends.

LTCG & Qualified Dividend Rates — Single 2026

Rate	Taxable Income	Notes
0%	$0 – $49,450	Qualified dividends also qualify
15%	$49,451 – $545,500	Most investors pay this rate
20%	Above $545,500	Add 3.8% NIIT = 23.8% combined

LTCG & Qualified Dividend Rates — MFJ 2026

Rate	Taxable Income	Notes
0%	$0 – $98,900	Qualified dividends also qualify
15%	$98,901 – $613,700	Most investors pay this rate
20%	Above $613,700	Add 3.8% NIIT = 23.8% combined

Key point: Preference income sits on top of ordinary income — it does not consume your lower brackets. However it counts toward MAGI for IRMAA, NIIT, the OBBBA Senior Bonus phase-out, and ACA subsidy thresholds.

3.8% Net Investment Income Tax (NIIT)

NIIT Rules

Filing threshold	$200,000 MAGI (Single)$250,000 MAGI (MFJ) — never inflation-adjusted
Rate applies to	Lesser of: (1) net investment income, or (2) MAGI over the threshold
Applies to	Dividends, interest, capital gains, passive rental income
Does NOT apply	Roth conversions, IRA/401(k) distributions, active business income, Social Security
Combined top rate	20% LTCG + 3.8% NIIT = 23.8% effective

MAGI for NIIT: AGI + excluded foreign earned income. Minimal add-backs for most taxpayers.

20% QBI Deduction — Section 199A

Up to a 20% deduction on net profit from pass-through businesses. The OBBBA (2025) makes this deduction permanent.

What Is the QBI Deduction?

When Congress passed the Tax Cuts and Jobs Act in 2017, corporations received a permanent rate cut from 35% to 21%. To level the playing field for business owners who file as individuals — sole proprietors, S-corp owners, partners, and LLC members — Congress created the Section 199A deduction. It allows qualifying business owners to deduct up to 20% of their net business profit from taxable income, effectively lowering their tax rate on business earnings.

What Is "Pass-Through" Income?

A pass-through business is one where profit passes directly to your personal tax return rather than being taxed at the corporate level. This includes sole proprietors (Schedule C), S-corporation shareholders, partners in a partnership, LLC members, and certain REIT dividends and publicly traded partnership income. The business itself pays no income tax — the owner does, on Form 1040.

A simple example. Your S-corporation generates $200,000 of qualified business income (QBI) in 2026. The 20% QBI deduction is $200,000 × 20% = $40,000. That $40,000 is subtracted from your taxable income — not your AGI. If taxable income before QBI was $250,000, it becomes $210,000. At the 24% bracket, that $40,000 deduction saves approximately $9,600 in federal income tax. The deduction does not reduce your AGI or your self-employment tax base.

What is an SSTB — and why does it matter?

SSTB stands for Specified Service Trade or Business — professional service businesses where the QBI deduction phases out at higher income levels. SSTBs include: law, medicine and health, financial services, consulting, athletics, performing arts, and brokerage. If your business is an SSTB and your taxable income exceeds $201,750 (Single 2026)$403,500 (MFJ 2026), your deduction phases out and is eventually eliminated entirely. Below that threshold, SSTB classification does not matter.

The W-2 wage & property limitation

If your taxable income exceeds the threshold and your business is not an SSTB, the deduction is capped — not eliminated. The cap is the greater of: (A) 50% of W-2 wages your business paid to employees, or (B) 25% of W-2 wages + 2.5% of the original cost of qualified business property. A business with no employees and no property may lose most of the deduction above this threshold.

QBI Deduction by Income Level — Single 2026

Taxable income = after standard or itemized deductions, before the QBI deduction itself

Taxable Income (Single)	Non-SSTB Business	SSTB (law, medicine, finance, consulting…)
Below $201,750	Full 20% QBI deduction. No wage or property tests.	Full 20% QBI deduction. SSTB classification doesn't matter below threshold.
$201,750 – $276,750 (phase-out)	W-2 wage / property limitation phases in proportionally.	Deduction phases out proportionally. SSTB begins losing eligibility.
Above $276,750	Capped at greater of (A) 50% of W-2 wages, or (B) 25% W-2 + 2.5% qualified property.	No QBI deduction. SSTBs lose deduction entirely.

QBI Deduction by Income Level — MFJ 2026

Taxable income = after standard or itemized deductions, before the QBI deduction itself

Taxable Income (MFJ)	Non-SSTB Business	SSTB (law, medicine, finance, consulting…)
Below $403,500	Full 20% QBI deduction. No wage or property tests.	Full 20% QBI deduction. SSTB classification doesn't matter below threshold.
$403,500 – $503,500 (phase-out)	W-2 wage / property limitation phases in proportionally.	Deduction phases out proportionally. SSTB begins losing eligibility.
Above $503,500	Capped at greater of (A) 50% of W-2 wages, or (B) 25% W-2 + 2.5% qualified property.	No QBI deduction. SSTBs lose deduction entirely.

Common QBI Questions

Does rental income qualify?	Sometimes. A rental activity that rises to the level of a trade or business may qualify. A safe harbor election exists for landlords meeting a 250-hour/year service test.
Does it reduce my SE tax?	No. The QBI deduction reduces income tax only. SE tax is calculated before QBI is applied.
What counts as QBI?	Net profit from the business — ordinary income minus ordinary deductions. Excludes capital gains, investment income, and W-2 wages paid to yourself as an S-corp owner.
Is there an overall limit?	Yes. The total QBI deduction cannot exceed 20% of taxable income minus net capital gains. This prevents the deduction from creating a tax loss.
When does it expire?	The OBBBA (2025) makes Section 199A permanent. It was previously set to expire after 2025.

Standard & Itemized Deductions — 2026

Standard & Universal Deductions — SingleStandard & Universal Deductions — MFJ

Deduction	2026
Standard Deduction — Single	$16,100
Standard Deduction — MFJ	$32,200
Age 65+ additional	$2,050
Blind	$2,050
Age 65+ additional (per qualifying spouse)	$1,650
Blind (per qualifying person)	$1,650
Charitable — non-itemizers (universal)	Up to $1,000Up to $2,000

Key Itemized Deductions — 2026

Itemize only when total exceeds $16,100 (Single)$32,200 (MFJ) standard deduction

Mortgage Interest	Up to $750,000 indebtedness (post-12/17/2017). Prior mortgages: $1,000,000 limit.
SALT	$40,400 cap. Phase-out above $505,000 MAGI. Reverts to $10,000 in 2030 absent legislation.
Charitable	Up to 60% of AGI for cash gifts to public charities. 30% for appreciated property. 0.5% AGI floor.
Medical Expenses	Expenses exceeding 7.5% of AGI. Includes premiums, long-term care, unreimbursed costs.
Investment Interest	Limited to net investment income for the year.
Casualty & Theft	Subject to 10% AGI floor. Federally declared disasters only.
Misc. (2% floor)	Eliminated by TCJA — OBBBA makes the elimination permanent.

SALT Phase-Out Detail

Scenario	Result
MAGI below $505,000	Full $40,400 SALT cap applies
MAGI above $505,000	Reduction = (MAGI – $505,000) × 30%
Maximum reduction	$30,400 (floors at $10,000)
Permanent floor	$10,000 (reverts 2030)

MAGI for SALT: AGI minus tax-exempt interest (municipal bond income) and foreign earned income exclusions.

OBBBA Senior Bonus Deduction (2025–2028)

Applies to both standard AND itemized filers. Stacks on top of all other deductions.

Detail	Amount / Rule
Per qualifying person 65+	$6,000
Both spouses age 65+	$12,000 combined
Phase-out begins	$150,000 MAGI (Single)$150,000 MAGI (MFJ)
Phase-out rate	6¢ per $1 over threshold
Fully phased out at	$250,000 MAGI
Example	$200k MAGI → $50k × 6% = $3,000 reduction

Key Tax Credits — 2026

Credit	2026 Rules
Child Tax Credit	$2,200 per child under age 17. Phase-out begins at $200,000 MAGI (Single)$400,000 MAGI (MFJ). Partially refundable up to $1,700 per child.
Child / Dependent Care	Up to $3,000 in expenses for one child, $6,000 for two or more. Credit is 20%–35% of eligible expenses. Non-refundable.
Adoption Credit	Up to $17,280 per child. Phase-out range: $259,190 – $299,190 MAGI. Non-refundable but can be carried forward up to five years.
EV Credit	Up to $7,500 for new qualifying electric vehicles; up to $4,000 for used. MAGI limit: $150,000 (Single)$300,000 (MFJ). Can be applied at point of sale or claimed on return.

Healthcare in Your Tax Plan

For retirees under 65, the ACA subsidy can save thousands in annual healthcare premiums. For Medicare-enrolled retirees, IRMAA surcharges can add thousands per year. Both are driven by MAGI — and each uses a slightly different MAGI definition.

ACA Subsidy Cliff — Pre-65 Retirees

Threshold	~$85,000 MAGI (400% FPL, 2-person household)
What happens at $1+	Entire subsidy = $0. Binary loss — not a phase-out.
Annual value at risk	$15,000 – $20,000+ per year for a couple in their early 60s
Strategy	Model the cliff before any Roth conversion. Sometimes zero conversion is correct until Medicare at 65.

MAGI for ACA: AGI + tax-exempt interest + non-taxable Social Security + excluded foreign earned income.

Hard cliff. A $1 overage eliminates the entire subsidy. This is not a phase-out.

Medicare IRMAA Surcharges — 2026

IRMAA is based on your 2024 MAGI (two-year look-back). $1 over a tier triggers the full surcharge for that tier.

IRMAA Surcharges — Single

2026 MAGI (Single)	Part B /mo	Part D /mo	Extra/yr
$109,000 or less	$202.90 (base)	Plan prem.	$0
$109,001 – $137,000	+$81.20	+$14.50	~$1,150
$137,001 – $171,000	+$202.90	+$37.50	~$2,885
$171,001 – $205,000	+$324.60	+$60.40	~$4,620
$205,001 – $500,000	+$446.30	+$83.30	~$6,355
Above $500,000	+$487.00	+$91.00	~$6,936

IRMAA Surcharges — MFJ

2026 MAGI (MFJ)	Part B /mo per person	Part D /mo per person	Extra/yr per couple
$218,000 or less	$202.90 (base)	Plan prem.	$0
$218,001 – $274,000	+$81.20	+$14.50	~$2,300
$274,001 – $342,000	+$202.90	+$37.50	~$5,770
$342,001 – $410,000	+$324.60	+$60.40	~$9,240
$410,001 – $750,000	+$446.30	+$83.30	~$12,710
Above $750,000	+$487.00	+$91.00	~$13,880

Not permanent. If income drops the following year, premiums reset. Model whether long-term Roth benefit exceeds 1–2 years of surcharges.

$1 over any tier = full tier surcharge. Based on 2024 MAGI (2-year look-back).

MAGI for IRMAA: AGI + tax-exempt municipal bond interest + excluded foreign earned income. Note: non-taxable Social Security is not added back for IRMAA (unlike ACA).

HSA & FSA Limits — 2026

Account	2026 Limit
HSA — Self-only coverage	$4,400
HSA — Family coverage	$8,750
HSA — Age 55+ catch-up	+$1,000 per eligible person
Healthcare FSA	$3,300
Healthcare FSA carryover	$660 maximum
Dependent Care FSA (DCAP)	$5,000 per household

HSA triple advantage: pre-tax contributions → tax-free growth → tax-free withdrawals for qualified medical expenses. After age 65, withdrawals for any purpose are taxed as ordinary income (like a traditional IRA). FSA: use-it-or-lose-it with limited carryover.

Traditional & Roth IRA — 2026

Two separate rules. Anyone with earned income can contribute to a Traditional IRA — there are no income restrictions on contributions. Whether that contribution is tax-deductible depends on your income and workplace plan coverage. Over the limit? You can still contribute as a nondeductible IRA — your basis is tracked on Form 8606, and this sets up the Backdoor Roth strategy.

Contribution Limits

Age	Contribution Limit
Under 50	$7,500
Age 50+	$8,600 ($7,500 + $1,100 catch-up — first ever indexed increase)

Traditional IRA Deductibility Phase-Out

Deductibility — Single 2026

Coverage Situation (Single)	Full Ded.	Phase-Out Range	No Ded. Above
NOT covered by any workplace plan	No limit	N/A	Never
Covered by a workplace plan	$129,000	$129k – $149k	$149,000

Deductibility — MFJ 2026

Coverage Situation (MFJ)	Full Ded.	Phase-Out Range	No Ded. Above
Neither spouse covered by any workplace plan	No limit	N/A	Never
Both spouses covered (or contributing is covered)	$129,000	$129k – $149k	$149,000
Contributing NOT covered; other spouse IS covered	$242,000	$242k – $252k	$252,000
MFS (any coverage)	$0	$0 – $10,000	$10,000

Often overlooked: If YOU are not covered by a workplace plan but your spouse IS, you can deduct your full IRA contribution up to $242,000 MAGI — far above the $129,000 "both covered" limit. Always verify Box 13 on each spouse's W-2 before assuming coverage.

Roth IRA Income Limits

Roth IRA — Single 2026

Single MAGI	Result
Below $153,000	Full contribution — $7,500, or $8,600 if age 50+
$153,000 – $168,000	Prorated — contribution reduces proportionally over the range
Above $168,000	No direct Roth IRA contribution. Use the Backdoor Roth strategy.

Roth IRA — MFJ 2026

MFJ MAGI	Result
Below $242,000	Full contribution — $7,500 per person, or $8,600 if age 50+
$242,000 – $252,000	Prorated — contribution reduces proportionally over the range
Above $252,000	No direct Roth IRA contribution. Use the Backdoor Roth strategy.

Backdoor Roth: Contribute to a nondeductible Traditional IRA → convert to Roth. Available at any income level. Pro-rata rule: if you hold other pre-tax IRA balances, all traditional IRA money is aggregated when calculating the taxable portion of the conversion (Form 8606). Rolling pre-tax IRAs into a 401(k) can eliminate the pro-rata problem entirely.

401(k) / 403(b) / Governmental 457(b) — 2026

Annual additions (§415) limit — all sources combined: $72,000.

Age	EE Deferral	Catch-Up	Max EE Total	§415 All Sources
Under 50	$24,500	—	$24,500	$72,000
50–59	$24,500	+$8,000	$32,500	$80,000
60–63 (Super C/U)	$24,500	+$11,250	$35,750	$83,250
64+	$24,500	+$8,000	$32,500	$80,000

Roth catch-up mandate (SECURE 2.0, effective 2026): If prior-year W-2 income exceeded $150,000, all catch-up contributions must be Roth (after-tax). Watch for plan-specific guidance on timing.

Non-Governmental 457(b)

Different rules from 401(k) — cannot stack catch-up contributions

Base deferral	$24,500 — same as 401(k)
Catch-up age 50+	$8,000 — same as 401(k)
3-yr special C/U	NOT available for non-governmental plans
Employer match	Not allowed in non-governmental plans
Early penalty	No 10% penalty on separation from service regardless of age

Governmental 457(b) 3-Year Special Catch-Up: Within 3 years of normal retirement age, participants may defer up to $49,000 (double the annual limit) using prior-year unused room. Cannot combine with the age-50 or age-60–63 super catch-up.

Required Minimum Distributions

Born before 1960	RMD begins at age 73
Born 1960 or later	RMD begins at age 75
IRS divisor at 73	26.5
Estimate	Account balance ÷ IRS divisor = minimum RMD
Roth IRA	No RMD — ever
Roth 401(k) post-2024	No RMD — eliminated by SECURE 2.0

2026 Quick Reference

Quick Reference — Single

Item	2026 Amount
Standard deduction	$16,100
0% LTCG threshold	$49,450 taxable income
Top of 22% bracket	$105,700
Top of 24% bracket	$201,775
Top of 32% bracket	$256,225
NIIT threshold	$200,000 MAGI
IRMAA Tier 1	$109,000 MAGI (based on 2024 income)
Roth IRA phase-out	$153,000 – $168,000 MAGI
SS wage base	$184,500
401(k) deferral	$24,500 (+ catch-up if eligible)
HSA family limit	$8,750

Quick Reference — MFJ

Item	2026 Amount
Standard deduction	$32,200
0% LTCG threshold	$98,900 taxable income
Top of 22% bracket	$211,400
Top of 24% bracket	$403,550
Top of 32% bracket	$512,450
NIIT threshold	$250,000 MAGI
IRMAA Tier 1	$218,000 MAGI (based on 2024 income)
Roth IRA phase-out	$242,000 – $252,000 MAGI
SS wage base	$184,500
401(k) deferral	$24,500 (+ catch-up if eligible)
HSA family limit	$8,750

How Your Income Is Taxed — Step by Step

Follow this flow to understand how every dollar moves from gross income to your final tax bill.

Gross Earned Income

W-2 Wages / Salary
Net Profit — Schedule C (self-employed)
Guaranteed Payments — K-1
Vested RSUs / NQSO bargain element
Taxable fringe benefits

− Section 125 Pre-Tax Deductions

Pre-tax health insurance premiums
HSA / FSA contributions via payroll
Dependent Care FSA

↓ Income Subject to FICA / SE Tax — Social Security & Medicare calculated here

− Pre-Tax Retirement Contributions

401(k), 403(b), 457(b) deferrals
Deferred compensation

+ Ordinary Investment & Other Income

Taxable interest — bank, CDs, money market
Short-term capital gains
Non-qualified dividends / K-1 investment income
Passive real estate income
Taxable pension / annuity / IRA / Roth conversions
Alimony received (pre-2019) / gambling winnings

+ Preference Investment Income

Qualified dividends
Long-term capital gains (held 1+ year)

− Above-the-Line Deductions

Deductible IRA contributions
HSA contributions (non-payroll)
Student loan interest / 50% of SE tax
SEP / Solo 401(k) / self-employed health insurance

↓ = Adjusted Gross Income (AGI)

− Standard or Itemized Deductions

Standard: $16,100 (Single 2026)$32,200 (MFJ 2026)
Itemized: mortgage interest, SALT cap $40,400, charitable, medical > 7.5% AGI

− OBBBA Senior Bonus Deduction

Up to $6,000 per qualifying person age 65+
Applies to standard AND itemized filers
Phase-out: $150,000 – $250,000 MAGI

↓ = Taxable Income (before QBI deduction)

− QBI Deduction — if applicable (up to 20% of qualified business income)

= Final Taxable Income → separate preference income to isolate ordinary

Apply taxes:
• Ordinary income → marginal bracket rates 10%–37%
• Preference income → 0% / 15% / 20%
• Additional Medicare Tax (0.9%) if MAGI > $200,000$250,000
• Net Investment Income Tax (3.8%) if MAGI > $200,000$250,000

= Your Federal Income Tax

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