2026 Tax Changes: What Corporate Professionals Should Know
A conversational, practical guide to a complicated year
Every so often, the tax landscape shifts in ways that matter for corporate professionals — not just accountants and policy experts. And 2026 is shaping up to be one of those years.
The rules are changing in ways that affect retirement contributions, deductions, Social Security taxation, and how your income flows through the system. None of this is meant to be intimidating. But it is worth understanding so you can make thoughtful decisions rather than reactive ones.
Below is a clear, friendly breakdown of what’s changing, why it matters, and how to think about it in the context of your long‑term financial plan.
1. Catch‑Up Contributions Are Getting a New Twist
If you’re 50 or older, you’ve probably used catch‑up contributions to boost your retirement savings. Historically, you could choose whether those extra dollars went in pre‑tax or Roth.
Starting in 2026, that flexibility disappears for higher‑income employees.
If your FICA wages are $150,000 or more, all catch‑up contributions must be Roth.
A few key points:
- Roth catch‑ups are made after tax, so they no longer reduce your taxable income today.
- The standard catch‑up limit increases to $8,000.
- The “super catch‑up” for ages 60–63 remains $11,250.
- Your retirement savings still grow tax‑free — but your current‑year tax bill may increase.
For anyone in their peak earning years, this is a meaningful shift. It’s worth revisiting your withholding, bonus planning, and overall tax strategy to avoid surprises.
2. The SALT Deduction Cap Is Increasing — Dramatically
The state and local tax (SALT) deduction has been capped at $10,000 since 2017, limiting how much many households could deduct.
Beginning in 2025 and continuing into 2026, that cap increases to over $40,000, with small annual adjustments through 2029.
Why this matters:
- Many households who have taken the standard deduction for years may now benefit from itemizing.
- Employees in high‑tax states (CA, NY, NJ, etc.) may see the biggest impact.
- Mortgage interest, charitable giving, and property taxes may now combine with SALT to create a larger deduction than the standard amount.
For some families, this opens the door to new planning strategies — such as bunching charitable gifts or timing deductible expenses.
3. Social Security Taxation May Shift for Retirees and Near‑Retirees
The income thresholds that determine how much of your Social Security is taxable haven’t changed in decades.
But your income will change under the new rules.
Higher AGI — whether from Roth catch‑up requirements, bonuses, or investment income — can cause a larger portion of your Social Security benefits to be taxed.
There’s also a temporary “senior bonus” deduction available from 2025–2028 for those 65 and older. But it phases out at certain income levels, which means decisions that increase your AGI could reduce or eliminate this benefit.
For retirees or those approaching retirement, this is an area where planning ahead can make a meaningful difference.
How to Think About All of This
You don’t need to become a tax expert. But you do want to understand how these changes interact with:
- Your income
- Your retirement contributions
- Your bonus structure
- Your Social Security benefits
- Your itemized vs. standard deduction strategy
- Your long‑term goals
A little planning now can go a long way toward avoiding surprises later.
If you’d like help understanding how these changes fit into your broader financial picture, I’m always happy to walk through it with you.
Take care and, as always, stay the course.
Colburn Wealth Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.