Navigating 2026 Tax Changes with Intention and Wisdom

Each new year brings change, but 2026 arrives with a particularly full plate of tax reforms that could significantly affect how families plan and give. At John Moore Associates, we see these changes as opportunities to steward resources wisely and reflect intentionality guided by biblical principles.

Let me walk you through some of the key updates we’re watching closely, so you can make the most of them in the months ahead.

A Window of Opportunity: Extended Tax Rates & Standard Deductions

Due to the continuation of the 2017 Tax Cuts and Jobs Act provisions under the "One Big Beautiful Bill" (OBBBA), we’re living in a season of historically low tax rates. This creates a planning opportunity, especially for strategies like Roth conversions or realizing capital gains while rates remain favorable.

In 2026, the standard deduction remains robust:

• Single filers: $16,100
• Married filing jointly: $32,200
• Extra for age 65+: $1,650 per person

Additionally, there’s a new senior deduction of $6,000 per person (or $12,000 per couple) for those over 65, but it phases out between $150,000–$250,000 of income. For retirees or early income planners, this means careful attention to income timing can preserve this benefit. Being mindful of where your income lands within that phase-out range could unlock thousands in tax savings.

Health Savings Accounts: Expanded Access & Benefits

HSAs have become one of our favorite tax-efficient tools, and now they’re accessible to more families. Certain Bronze and Catastrophic plans under the Affordable Care Act now qualify, expanding eligibility for self-employed individuals and early retirees.

Other enhancements include:

• Telehealth and direct primary care services now qualify pre-deductible
• Direct care fees covered by HSA funds (up to $150/month individual, $300/month family)
• Inflation-adjusted contribution limits

One important note: HSA contributions must stop once you’re enrolled in Medicare. This rule remains unchanged, so timing enrollment and contributions carefully is essential for those approaching age 65.

For those in transition years, perhaps retiring early or bridging the gap before Medicare, an HSA can serve as a powerful tool to offset medical costs while maintaining tax efficiency. Coordinating your insurance choices with HSA eligibility is a new, worthwhile planning step.

Retirement Contributions: Bigger Buckets, New Rules 

The Secure 2.0 Act introduced changes to 401(k) and 403(b) contributions in 2026:

• Base contribution limit: $24,500
• Catch-up for 50+: $8,000
• Super catch-up (ages 60–63): $11,250

One big change is that if you earn over $150,000, all catch-up contributions must go into Roth (after-tax) accounts. That’s a significant planning shift for higher-income earners, who may be used to the pre-tax advantage.

This change invites a deeper look at your Roth vs. pre-tax strategy and may nudge some savers to embrace Roth earlier than expected. If you're between ages 60–63, this may be your highest-earning window and your largest opportunity to leverage retirement savings.

Be proactive in checking plan limits and automating increased contributions where possible. If unsure how to split between Roth and pre-tax, now is a great time to revisit your long-term tax assumptions and coordinate with your advisor.

New Deductions: Charitable Giving and More 

Charitable giving receives a meaningful update in 2026. Individuals can now deduct up to $1,000, and married couples can deduct up to $2,000, for cash gifts to qualified charities. This applies even if you take the standard deduction, offering a new way for givers to receive a tax benefit without itemizing. It's important to note that this deduction is limited to cash-only donations; other forms of giving, like stock or property, are not eligible.

However, a new rule imposes a 0.5% AGI floor for itemized charitable deductions. This means only the amount above that threshold can be deducted, making smaller gifts less impactful for itemizers. In light of this, Qualified Charitable Distributions (QCDs) from IRAs remain a powerful tool for givers over age 70½, as they reduce taxable income directly without regard to AGI limits.

Planning your giving approach, whether through direct gifts, bunching contributions, or utilizing QCDs, should now be part of your broader tax strategy. Tracking your income and generosity levels throughout the year will help avoid surprises and maximize your impact.

Other new deductions of note:

• State and local tax deduction cap increased from $10,000 to $40,000
• New deductions for auto loan interest, overtime pay, and TIP income, now effective through 2028

Stewardship Requires Intention

It’s easy to miss out on deductions or trigger phase-outs without realizing it. That’s why our encouragement to clients is simple: be intentional. Plan now. Coordinate with your tax advisor. Revisit your income strategy, savings approach, and giving goals in light of these changes. Sometimes a small shift in timing or tactics can mean the difference between gaining a deduction or losing one.

And remember, our role is to provide education and perspective, not specific tax advice.

Proverbs 21:5 reminds us, “The plans of the diligent lead to profit as surely as haste leads to poverty.” With diligence and wisdom, we believe 2026 can be a year of strategic generosity and thoughtful stewardship.

If you’re unsure how these changes might affect you, or want help thinking through income and giving strategies, let’s talk. You can also view our full breakdown of the One Big Beautiful Bill Act for more information and insight from our team.