New tax laws for 2026 that you should know

The new year brings more than resolu- tions and fresh starts; it also ushers inseveral tax changes that could affect yourwallet. Whether you’re saving for retire-ment, funding your child’s education or supporting your favorite charity, here’s are a few things you need to know about the tax landscape in 2026.

More room to save for retirement and healthcare. There’s good news for savers: Contribution limits for retirement accounts are going up. If you’re under 50,you can now contribute up to $7,500 to an IRA, which is up from $7,000 in 2025. Those 50 and older can contribute an additional $1,000, for a total of $8,600.

The limits for 401(k), 403(b) andgovernmental 457(b) plans are also in-creasing, with workers younger than 50 able to defer up to $24,500. Visit IRS.govand search “401k limit increases” for an article outlining the details.

Health savings account limits are rising too. In 2026, individual coverage increased to $4,400 and family coverage to $8,750. If you are age 55 or older andare not enrolled in Medicare, you can contribute an additional $1,000 as a catch-up contribution.

The start of the year is an ideal time to review your contributions and consider increasing them, even by small amounts which can add up over time.

A catch-up rule for high earners. If you’re 50 or older and earned more than$150,000 last year, there’s a new wrinkle in your retirement planning. You can stillmake catch-up contributions to your work-place retirement plan, but they must nowbe Roth contributions rather than tradi-tional pre-tax contributions. This includes 401(k), 403(b) and 457(b) plans.

While you won’t get an immediate taxbreak, Roth contributions offer tax-free income in retirement and can provide a tax-free legacy for your heirs.

Expanded benefits for 529 edu- cation plans. Families using 529 plans to cover K-12 expenses will see the annualfederal distribution limit double from $10,000 to $20,000 per student. The defi-nition of qualifying expenses has also expanded to include curriculum, books, certain tutoring expenses and testing fees.

This change provides more flexibi- lity for families with overfunded plans and increases options for managing edu-cation costs across multiple children or beneficiaries.

New charitable giving provisions. The rules around charitable deductions areshifting in two directions. Taxpayers whotake the standard deduction can now de-duct up to $1,000 in cash donations ($2,000for joint filers) to qualified organizations.

However, those who itemize deduc- tions face a new threshold: only charitablecontributions exceeding 0.5% of adjusted gross income are now deductible. Donorsmay want to consider bunching strategiesor using donor-advised funds to maxi-mize their tax benefits.

Getting help. Navigating these taxchanges can be challenging, but you don’thave to go it them alone. A qualified fi-nancial advisor and tax professional can help you understand how these and other changes affect your specific situation. Together, you can develop strategies tomake the most of new opportunities whileminimizing your tax burden.