JANUARY 2026 Newsletter: New Retirement Contributions Limits for 2026

The Internal Revenue Service recently released new limits for 2026. Although these adjustments won’t bring any major changes, there are some minor elements to note.

Individual Retirement Accounts (IRAs)

IRA contribution limits are up $500 in 2026 to $7,500. Catch-up contributions for those over age 50 are up $100 to $1,100, bringing the total limit to $8,600.

Roth IRAs
The income phase-out range for Roth IRA contributions increases to $153,000-$168,000 for single filers and heads of household. For married couples filing jointly, the phase-out will be $242,000 to $252,000. Married individuals filing separately see their phase-out range remain at $0-10,000.

Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $1,000 increase for 2026, the limit rising to $24,500. Those aged 50 and older will now have the ability to contribute an extra $8,000, bringing their total limit to $32,500. Those aged 60, 61, 62, and 63 may enjoy a higher catch-up contribution of $11,250, raising their total contribution limit to $35,750.

SIMPLE Accounts
A $500 increase in limits for 2026 gives individuals contributing to this incentive match plan a $17,000 stoplight. Pursuant to the Secure Act 2.0, certain applicable plans have an increased limit of $18,100.

Other Items of Note
In addition to contribution limit changes, the IRS also announced a the annual exclusion for gifts to remain at $19,000 per person and an increase to the estate tax exclusion threshold to $15 million per individual. 

Keep in mind that we provide updates for informational purposes only, so consult with your tax professional before making any changes in anticipation of the new 2026 levels. And as always, please feel welcome to call our office with any questions.

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• Happy 2026! Wishing you and those close to you a new year of possibilities and opportunity.

Should You Work with a Tax Preparer?

Here are some tips from the IRS on how to choose a tax preparer who meets your needs:

• Check the IRS directory of Federal Tax Return Preparers
• Check the preparer's history with the Better Business Bureau
• Ask about fees
• Ask if the preparer plans to use E-file
• Make sure the preparer is available
• Check to see if the preparer signs and includes their preparer Tax Identification Number
• Understand the preparer's credentials

Choosing a reputable and reliable tax preparer can help protect you and your tax return.

^{This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.} 

^{Tip adapted from IRS.gov}

Be Vigilant and Protect Yourself from Texting Scams

Unfortunately, instances of IRS-themed text scams are on the rise, and these scam attempts could put your sensitive tax data at risk. Most of these scam messages look like they're coming from the IRS and have fake message to lure you into providing personal information. They may also ask for your information to help you set up an IRS account online.

Be aware of these scams to protect yourself and your data. Remember, the IRS does not send emails or texts asking for personal or financial information. If you receive a text like this, report it to the IRS by emailing: phishing@IRS.gov.

^{This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.} 

What five-letter English word can be pronounced the same even with four of its letters removed?

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Last Month's Riddle: Christine likes grapes but not potatoes. She likes squash but not lettuce, and peas but not onions. Following the same rule, will she like pumpkins or apples?

Answer: Pumpkins. Christine only likes fruits and vegetables that grow on vines.