The 2026 retirement tax landscape is meaningfully different from 2025, even though the headline brackets did not change. The One Big Beautiful Bill Act made the seven TCJA brackets permanent, added a new $6,000 senior bonus deduction through 2028, raised the SALT cap to $40,400, and clarified RMD ages under SECURE 2.0. Capital gains thresholds, IRMAA brackets, and Social Security provisional income rules all shifted in ways advisors need to walk clients through.
Most retirees do not read tax legislation. Most advisors do not have the time to brief every client on every change. The result, in any year a major bill passes, is a slow drift of confusion that shows up in client meetings as half-remembered headlines and questions that start with ‘I read somewhere that…’
2026 is the year that drift hit a peak. The One Big Beautiful Bill Act (Public Law 119-21), signed July 4, 2025, rewrote the TCJA sunset narrative most advisors had been planning around for years. New deductions were added. Existing rules were extended. RMD ages locked in under SECURE 2.0. Capital gains thresholds shifted with inflation. But just because OBBBA extended the runway of lower taxes doesn’t mean the urgency has disappeared. In fact, it’s more important than ever that clients understand what has changed so they can make informed decisions during this important time.
Here is a clean walk-through of what actually changed in the 2026 retirement tax landscape, what stayed the same, and where the planning opportunities sit for advisors heading into client conversations this year.
What Stayed the Same in 2026
Start with the easy part. The seven federal income tax brackets are unchanged at 10, 12, 22, 24, 32, 35, and 37 percent. The OBBBA made them permanent in July 2025, replacing the previously scheduled reversion to the higher pre-TCJA brackets. The 10 and 12 percent brackets received an additional inflation adjustment for 2026 on top of the standard inflation indexing.
(Of course, like all the “permanent” provisions in OBBBA, “permanent” doesn’t mean it will stay this way forever. It just means it won’t automatically sunset or change. Congress can still vote to change these bracket rates at any time.)
The qualified business income deduction under Section 199A is also “permanent” now, with expanded phase-out ranges that pull some specified service trade or business owners back into eligibility.
The estate tax exclusion went up rather than down, raised to $15 million per person for 2026 deaths instead of dropping to roughly $7 million as the original sunset would have done.
The 2026 Retirement Tax Cheat Sheet
Here is the 2026 baseline data every advisor should have in hand for client conversations this year.
| Item | 2026 Figure |
| Standard deduction (single) | $16,100 |
| Standard deduction (MFJ) | $32,200 |
| Senior bonus deduction (age 65+) | $6,000 single / $12,000 MFJ when both spouses qualify |
| Long-term capital gains 0% threshold (single) | $49,450 of taxable income |
| Long-term capital gains 0% threshold (MFJ) | $98,900 of taxable income |
| First IRMAA bracket (single MAGI) | $109,000 |
| Social Security COLA | 2.8 percent |
Source: IRS Revenue Procedure 2025-32 (2026 inflation adjustments); CMS 2026 Medicare Parts A and B Premiums (Nov 2025); SSA 2026 COLA Fact Sheet.
The New Senior Bonus Deduction: A 2026 Planning Lever
OBBBA created a new deduction that did not exist in any prior law. Filers age 65 and older can claim an additional $6,000 deduction, separate from the existing extra standard deduction for seniors. Married couples where both spouses qualify can claim $12,000 between them.
The deduction phases out above MAGI thresholds. For 2026, the phase-out begins around $77,000 to $78,000 for single filers and around $155,000 to $156,000 for married couples filing jointly, indexed up from the 2025 starting points of $75,000 and $150,000. Above MAGI of $175,000 single and $250,000 married, the deduction phases out completely. The reduction runs at six cents per dollar of MAGI above the threshold.
This is a temporary provision. The senior bonus deduction is in the code for tax years 2025 through 2028. Unless Congress extends it, the deduction expires after 2028.
For advisors, the planning angle is twofold. First, for some clients close to the threshold, the new deduction is a real reason to manage MAGI carefully in the 65-and-up years, because crossing the phase-out can cost the client real money if there aren’t tax-savings to offset it. Second, the four-year window gives a reason to have the conversation now rather than later. It’s a new provision that many savers still feel confused about, so helping educate them is a good conversation starter for better planning.
RMD Ages Clarified for 2026
SECURE 2.0 raised the required minimum distribution starting age in two steps. The 2026 status of those changes is finally settled and worth getting right in client conversations.
Clients born between 1951 and 1959 must begin RMDs in the year they turn 73.
Clients born in 1960 or later must begin RMDs in the year they turn 75.
The first RMD can be delayed until April 1 of the year after the client turns 73 (or 75). Clients who wait must take two RMDs in that calendar year, which can stack income and trigger IRMAA, Social Security taxation, and bracket creep.
Two other SECURE 2.0 RMD changes are now fully in effect for 2026. The penalty for missing an RMD dropped from 50 percent to 25 percent, with a further reduction to 10 percent if the client corrects the miss within two years. And RMDs from designated Roth 401(k) and Roth 403(b) accounts are eliminated, putting them in line with how Roth IRAs already worked.
The 2026 Capital Gains Window for Retirees
The 2026 long-term capital gains brackets are inflation-adjusted but the structure is unchanged. Long-term gains are taxed at 0, 15, or 20 percent, with the breakpoints based on taxable income.
For single filers in 2026, the 0 percent capital gains rate applies up to $49,450 of taxable income. For married couples filing jointly, the 0 percent threshold is $98,900. The 20 percent rate kicks in above $545,500 single and $613,700 married.
For retired clients who are between Social Security claiming age and the start of large RMDs, this is a planning window most savers do not realize they have. A married couple with modest pension income, no W-2 wages, and a strategically timed Roth conversion can sit in the 0 percent capital gains bracket for several years. The right move is rarely to spend that window doing nothing. It is to harvest gains, reset cost basis on appreciated assets, or layer in a partial Roth conversion at the same time.
Social Security Taxation in 2026: What Changed
There is a lot of noise in the headlines about ‘no tax on Social Security’ starting in 2026. But the federal provisional income rules that determine how much of a client’s Social Security benefits get taxed did not change. Up to 50 percent of benefits still become taxable when combined income runs $25,000 to $34,000 for individuals or $32,000 to $44,000 for married couples filing jointly. Above those upper limits, up to 85 percent of benefits become taxable.
What changed is the senior bonus deduction I discussed above. By adding $6,000 (or $12,000 for married couples) of new deduction on top of the standard deduction for many savers, OBBBA reduces taxable income in an effort to “offset” the taxes they may pay on their Social Security benefit.
The practical effect can be real, even if the legal mechanism is not what some clients think. Advisors should be careful framing this in client conversations. It’s not that ‘Social Security is no longer taxed’ – but there’s still great news that ‘the new senior deduction can potentially offset the federal tax on your Social Security benefit’.
IRMAA Brackets Jumped for 2026
Medicare Part B and Part D income-related surcharges, known as IRMAA, are indexed to inflation and adjusted to match the needs of the program. As we’ve seen over the past few years, the 2026 brackets jumped meaningfully from 2025.
The first IRMAA bracket for 2026 starts at $109,000 of MAGI for single filers and $218,000 for married couples filing jointly. The standard 2026 Part B premium is $202.90 per month, finalized by the Centers for Medicare & Medicaid Services in November 2025.
While the threshold for paying IRMAA surcharges was adjusted, retirees also saw a higher surcharge. In fact, for the first tier of IRMAA, savers saw a 9.1% increase in 2026.
Because IRMAA uses a two-year lookback, the 2026 premium is based on the client’s 2024 tax return. Clients whose 2024 income was higher than expected will see the surcharge in their 2026 Medicare premium even if their current income is much lower. SSA-44 appeals are available for qualifying life-changing events.
The SALT Cap Window: A Four-Year Reset
OBBBA raised the SALT deduction cap from $10,000 to $40,400 for 2026. The higher cap is temporary and runs through 2029, then drops back to $10,000 starting in 2030.
For retirees in high-tax states, this changes the itemizing math for the next four tax years. Clients in California, New York, New Jersey, Massachusetts, and Illinois who gave up on itemizing under the old cap may flip back to itemizing in 2026, especially when state income tax is layered with property tax and modest charitable giving.
The four-year window is worth flagging now. A client who does not know about the change will keep using the standard deduction by default, which may leave money on the table.
Planning Conversations Worth Having This Year
Three conversations are worth scheduling with retired or near-retired clients in 2026.
1. The senior bonus deduction conversation for clients age 65 and up with MAGI under the phase-out thresholds. This is found money for a four-year window. It can also create a temporary lower tax environment for savers looking to convert funds to tax-free accounts. Roth conversions have gotten more complicated post-OBBBA, as advisors must balance taxes, deductions and IRMAA today with tax and IRMAA savings long term. You’ll want good software to help guide the decision (I’m partial to Stonewood’s Roth Done Right software, naturally).
2. The post-OBBBA Roth conversion conversation gives us a longer runway to help our clients. I feel confident that tax rates for higher-net-worth Americans will rise in the years to come, and OBBBA has given us an opportunity to help our clients prepare at today’s extended lower rates. But we have to help our clients see that today’s lower rates are not likely to last forever – certainly not through the decades ahead when they will be retired.
3. The multi-year MAGI projection for clients approaching age 73 or 75. With RMDs, IRMAA brackets, the senior bonus phase-out, and capital gains thresholds all keyed off MAGI, the value of a clear three-to-five-year projection is higher than it has been in years.
The Bottom Line for 2026
The 2026 retirement tax landscape is not the dramatic bracket reset advisors were preparing for. It is something quieter and arguably more consequential: a legislatively stable bracket structure (at least in the next few years) layered with several new provisions that reward MAGI-aware planning, especially in the 65-and-up years.
For advisors, the work is the same as it always is. Read the new rules carefully, update the projection software, and walk clients through the changes one piece at a time. The clients who benefit most are the ones whose advisor takes the time to explain what changed without overselling the headlines.
Need help maximizing Roth conversions in the 2026 retirement tax landscape? Stonewood’s Roth analysis software is built around the post-OBBBA bracket structure and includes the new senior bonus deduction, IRMAA brackets, and SECURE 2.0 RMD ages. Schedule a demo at stonewoodfinancial.com.
Disclosure: Stonewood Financial provides analysis software for licensed advisors. This article is educational and does not constitute tax, legal, or financial planning advice. Tax law summaries reflect provisions of the One Big Beautiful Bill Act (Public Law 119-21) signed July 4, 2025, and the SECURE 2.0 Act. Advisors and clients should verify current figures with the IRS, SSA, and CMS before client meetings.
FAQ: 2026 Retirement Tax Changes
What are the biggest tax changes for retirees in 2026?
The biggest 2026 changes are the new $6,000 senior bonus deduction (through 2028), the higher SALT cap of $40,400 (through 2029), the IRMAA bracket increase to $109,000 single and $218,000 married, the inflation-adjusted capital gains thresholds, and the SECURE 2.0 clarification that RMDs begin at 73 or 75 depending on birth year.
What is the senior bonus deduction in 2026?
The senior bonus deduction is a new $6,000 deduction (or $12,000 for married couples where both spouses qualify) for filers age 65 and older. It begins to phase out around MAGI of $77,000 to $78,000 for single filers and $155,000 to $156,000 for married couples filing jointly, and phases out completely at $175,000 and $250,000. The provision runs through tax year 2028.
At what age do RMDs start in 2026?
RMDs start at age 73 for clients born between 1951 and 1959, and at age 75 for clients born in 1960 or later, under SECURE 2.0.
Are Social Security benefits taxed in 2026?
Social Security benefits are still subject to federal taxation under the same provisional income rules. Up to 50 percent of benefits become taxable above the lower thresholds, and up to 85 percent above the higher thresholds. The new senior bonus deduction often offsets this federal tax in practice for lower- and middle-income retirees, but the underlying provisional income rules are unchanged.
What is the 0 percent capital gains threshold for 2026?
For 2026, long-term capital gains are taxed at 0 percent up to $49,450 of taxable income for single filers and up to $98,900 for married couples filing jointly.
What is the SALT cap in 2026?
The SALT deduction cap is $40,400 for tax year 2026, raised from $10,000 under OBBBA. The higher cap runs through 2029 and reverts to $10,000 in 2030.
What is the standard deduction for retirees in 2026?
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. Filers age 65 and older receive an additional standard deduction on top of those amounts, plus the new senior bonus deduction if they qualify.
What is the IRMAA threshold for 2026?
The first 2026 IRMAA bracket begins at $109,000 of MAGI for single filers and $218,000 for married couples filing jointly. IRMAA uses a two-year lookback, so 2026 premiums are based on 2024 tax returns.
Sources and References
- Internal Revenue Service, 2026 Filing Season Updates and Resources for Seniors: https://www.irs.gov/newsroom/2026-filing-season-updates-and-resources-for-seniors
- Internal Revenue Service, Check Your Eligibility for the New Enhanced Deduction for Seniors: https://www.irs.gov/newsroom/check-your-eligibility-for-the-new-enhanced-deduction-for-seniors
- Internal Revenue Service, RMD FAQs: https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
- Centers for Medicare & Medicaid Services, 2026 Medicare Parts A and B Premiums and Deductibles: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-and-deductibles
- Social Security Administration, 2026 COLA Fact Sheet: https://www.ssa.gov/news/en/cola/factsheets/2026.html
- Tax Foundation, 2026 Tax Brackets and Federal Income Tax Rates: https://taxfoundation.org/data/all/federal/2026-tax-brackets/
- Kiplinger, How the New $6,000 Senior Bonus Deduction Works: https://www.kiplinger.com/taxes/how-the-senior-bonus-deduction-works
- Kiplinger, IRS Updates Capital Gains Tax Thresholds for 2026: https://www.kiplinger.com/taxes/irs-updates-capital-gains-tax-thresholds
- Schneider Downs, RMD Rules for 2026: https://schneiderdowns.com/our-thoughts-on/rmd-rules-for-2026/
- Mercer Advisors, Is Social Security Taxed in 2026?: https://www.merceradvisors.com/insights/retirement/is-social-security-taxed-in-2026-what-retirees-need-to-know-about-new-rules/
