The biggest 2026 tax changes for high earners come from the One Big Beautiful Bill Act, signed July 4, 2025. It made the 2017 tax brackets permanent, raised the SALT cap to $40,400 for 2026 with a phase-down above $505,000 of income, put a 0.5% of AGI floor on itemized charitable gifts, capped the value of itemized deductions at 35% for the top bracket, and lowered the income level where the AMT exemption disappears. Most of these rules apply to the year that ends December 31, 2026, so the decisions that use them have to be made before then.
The table summarizes what changed and who it reaches. The sections below cover each rule, then a ranked year-end checklist.
| Change | 2026 rule | Who it hits |
|---|---|---|
| Brackets | 10% to 37%, now permanent | Everyone |
| Standard deduction | $16,100 single, $32,200 joint, $24,150 HoH | Non-itemizers |
| SALT cap | $40,400, cut above $505,000 MAGI | High-tax itemizers |
| Charitable limits | 0.5% of AGI floor, 35% cap | Itemizers, top bracket |
| Non-itemizer charity | $1,000 ($2,000 joint) | Standard deduction takers |
| AMT | Phase-out from $500,000 ($1M joint) | ISO holders, high earners |
| QSBS | Up to 100% excluded, $15M cap | Founders, early employees |
| Estate and gift | $15M per person | Larger estates |
| Trump accounts | Contributions from July 4, 2026 | Parents of kids under 18 |
What are the 2026 tax brackets and standard deduction?
The rates stay the same as 2025. Only the thresholds moved with inflation.
| Rate | Single, over | Joint, over |
|---|---|---|
| 10% | $0 | $0 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
The 2026 standard deduction is $16,100 for single filers, $32,200 for joint filers, and $24,150 for heads of household.
How does the 2026 SALT cap work?
The state and local tax deduction is capped at $40,400 in 2026 ($20,200 married filing separately), up from $40,000 in 2025. The cap rises 1% a year through 2029 and returns to $10,000 in 2030, under 26 U.S.C. 164(b)(7).
Above $505,000 of modified AGI, the cap shrinks by 30% of the excess. It cannot drop below $10,000, which it reaches at about $606,333. A joint return with $555,000 of MAGI has a cap of $25,400: $40,400 minus 30% of $50,000.
That phase-down raises your marginal rate inside the band. If you itemize and pay at least $40,400 in state and local taxes, each extra $1,000 of MAGI between $505,000 and $606,333 also removes $300 of deduction. In the 35% bracket, that $1,000 costs about $455 in federal tax instead of $350. A Roth conversion, bonus, or stock sale that lands in that band is more expensive than the bracket table suggests.
What changed for charitable giving in 2026?
Three rules took effect January 1, 2026, all from the amended section 170 and section 68:
- A 0.5% floor for itemizers. Only gifts above 0.5% of your contribution base (generally AGI) count. At $600,000 of AGI, the first $3,000 you give each year is not deductible.
- A 35% value cap for the top bracket. Itemized deductions are reduced by 2/37 of the lesser of your itemized deductions or your taxable income above the 37% threshold. If you are fully in the 37% bracket, a $50,000 gift saves about $17,500 in federal tax instead of $18,500.
- A deduction for non-itemizers. You can deduct up to $1,000 of cash gifts ($2,000 joint) while taking the standard deduction. Gifts to donor-advised funds and supporting organizations do not qualify.
The 60% of AGI limit on cash gifts to public charities is now permanent. The floor and the cap are permanent too, so under current law no later year is more generous for itemizers than 2026. See IRS Publication 526 for the rest of the charitable rules.
What changed for founders and ISO holders?
Two changes matter most for equity compensation.
QSBS. For qualified small business stock acquired after July 4, 2025, section 1202 now excludes 50% of the gain after three years, 75% after four, and 100% after five. The per-issuer cap rose to $15 million, indexed for inflation after 2026, and the company’s gross assets can be up to $75 million at issuance, up from $50 million. Stock acquired on or before July 4, 2025 keeps the old five-year, $10 million rules.
AMT. The 2026 AMT exemption is $90,100 for single filers and $140,200 for joint filers. It now starts phasing out at $500,000 of alternative minimum taxable income ($1,000,000 joint), down from $626,350 ($1,252,700 joint) in 2025, and it shrinks by 50 cents per dollar instead of 25, under section 55(d). The ISO bargain element counts toward that income, so the same exercise can create more AMT in 2026 than it would have in 2025. Model an exercise before you place it; how to avoid AMT on ISOs covers the mechanics.
Who gets the senior, tips, and overtime deductions?
These deductions run from 2025 through 2028 and are available whether or not you itemize. Each phases out as modified AGI rises, so most high earners get little or nothing.
| Deduction | Max | Phase-out (single / joint) | Gone (single) |
|---|---|---|---|
| Senior (65+) | $6,000 per person | $75,000 / $150,000 | $175,000 |
| Tips | $25,000 | $150,000 / $300,000 | $400,000 |
| Overtime | $12,500 ($25,000 joint) | $150,000 / $300,000 | $275,000 |
Overtime counts only the premium part of pay the Fair Labor Standards Act requires, the “half” in time and a half. Salaried employees exempt from FLSA overtime do not get it. Tips must come from an occupation on the IRS list, and married couples must file jointly to claim either deduction. The statutes are section 224, section 225, and section 151(d)(5).
What else changed: Trump accounts, 1099-K, 1099-DA, and estates?
- Trump accounts. Contributions are allowed starting July 4, 2026, up to $5,000 a year per child, of which an employer can contribute up to $2,500. U.S. citizen children born in 2025 through 2028 can get a $1,000 federal deposit after an election. See what is a Trump account and the IRS Trump accounts page.
- Form 1099-K. Payment apps and marketplaces file a 1099-K only when you receive more than $20,000 across more than 200 transactions, retroactive to 2021, per the IRS. The income is still taxable without the form.
- Form 1099-DA. Crypto brokers reported gross proceeds for 2025 sales. For 2026 sales they must also report basis, but only for “covered” assets: those acquired in 2026 or later in the same custodial account. Coins bought before 2026 or moved in from another wallet will usually arrive without basis, per the Form 1099-DA instructions. Software such as CoinTracker fills that gap.
- Estate and gift tax. The basic exclusion is $15 million per person in 2026, indexed after that. The annual gift exclusion is $19,000 per recipient.
What are the 2026 retirement contribution limits?
| Account | 2026 limit |
|---|---|
| 401(k), 403(b), 457 | $24,500 |
| Catch-up, age 50+ | $8,000 ($11,250 at 60 to 63) |
| Total 401(k) | $72,000 before catch-ups |
| IRA | $7,500 ($8,600 at 50+) |
| HSA | $4,400 self, $8,750 family, +$1,000 at 55+ |
If your 2025 FICA wages from your employer topped $150,000, your 2026 catch-up must go in as Roth. Details are in the IRS announcement, the 401(k) limits guide, and the Roth IRA limits guide.
What should high earners do before December 31, 2026?
Ranked for a household with high salary or equity income:
- Check your estimated-tax safe harbor. You avoid the underpayment penalty by paying 90% of your 2026 tax, or 110% of your 2025 tax if your 2025 AGI was above $150,000, per IRS Publication 505. RSU vests withheld at the flat 22% often leave a gap. Withholding counts as paid evenly through the year, so raising it on a December paycheck can fix earlier quarters, while a fourth-quarter estimate is due January 15, 2027. The bonus tax calculator shows the gap on a bonus or vest.
- Size this year’s charitable giving. Bunching two or more years of gifts into 2026, often through a donor-advised fund, clears the 0.5% floor once instead of every year. Give shares held more than a year to skip the capital gain. If you take the standard deduction, give up to $1,000 ($2,000 joint) in cash directly to a charity, not to a donor-advised fund.
- Business owners: decide on a PTET payment. If your state offers a pass-through entity tax election, your partnership or S corporation can pay state tax at the entity level, where it is deductible outside the $40,400 cap under IRS Notice 2020-75. The law left that route in place. A cash-basis entity generally has to pay by December 31 to deduct it in 2026, and state election deadlines vary.
- Harvest losses. Realized losses offset gains, plus up to $3,000 of ordinary income. Avoid buying a substantially identical security within 30 days before or after the sale. See tax-loss harvesting.
- Fill a low bracket with a Roth conversion. A conversion is ordinary income in the year it happens. Check whether it lands in the SALT phase-down band or above the 3.8% net investment income tax threshold before you run it; the Roth conversion calculator estimates the tax.
- Time equity events. Run any ISO exercise against the lower 2026 AMT phase-out. If you can early exercise startup stock that may qualify as QSBS, exercising with an 83(b) election generally starts the three-year clock for the first partial exclusion. Decide before the next RSU vest whether you will hold or sell.
- Fund accounts with year-end deadlines. 401(k) deferrals must come out of 2026 paychecks. IRA and HSA contributions for 2026 can wait until April 15, 2027.
- Use the $19,000 annual gift exclusion. Each person can give $19,000 to each recipient in 2026 without using lifetime exemption. Unused exclusion does not carry over to 2027.
How Nino handles this each year
A Nino CPA reviews these rules against your own numbers before December: your SALT position, the gifts you plan, your vests and exercises, and your withholding. Federal and state filing is included on every Advisor plan, which start at $3,600 a year, and nothing is filed until you approve it. See how the work runs.