8 Tax Changes in 2026 for Filers Over 55

The tax landscape shifted significantly in 2026 — most of the changes stem from the One Big Beautiful Bill, and several of them are specifically designed to benefit pre-retirees and retirees. Here's what changed, how much it matters, and what you should do about it.

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1. Standard Deduction Increases

The standard deduction in 2026:

• $32,200 for married filing jointly
• $16,100 for single filers

That's up $700 (single) and $350 (joint) from 2025. Combined with the Senior Bonus Deduction below, the effective standard deduction for a married couple over 65 can reach $44,200.

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2. $6,000 Senior Bonus Deduction

Filers 65 and older receive an extra $6,000 deduction per person on top of the standard deduction. For a married couple where both spouses are 65+, that's $12,000 in additional tax relief — no itemizing required.

Easy to miss: This phases out by 6 cents for every dollar above $75,000 (single) / $150,000 (married). At $85,000 single, you'd receive $5,400 instead of $6,000.

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3. SALT Cap Rises to $40,400

The State and Local Tax deduction cap — previously $10,000 since 2024 — rises to $40,400 in 2026. This primarily benefits high-income earners in high-tax states like California, New York, New Jersey, and Minnesota.

The cap phases back down above $505,000 in income.

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4. Car Loan Interest Deduction

New in 2026: you can deduct interest on car loans for new U.S.-assembled vehicles, up to $10,000. This is an above-the-line deduction, available even if you take the standard deduction.

Phases out above $100,000 (single) / $200,000 (married) MAGI.

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5. Super Catch-Up for Ages 60 to 63

For 401(k) participants between ages 60 and 63, the catch-up contribution limit jumps to $11,250 — compared to the standard $8,000 catch-up for those 50 and older. Combined with the regular $23,500 limit, the total 401(k) ceiling for this age group is $34,750.

This is a four-year window to accelerate tax-deferred retirement savings before RMDs and distributions begin.

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6. Mandatory Roth Catch-Up

If your prior-year FICA wages exceeded $150,000, all catch-up contributions must now go to a Roth account rather than pre-tax. This means the tax benefit is deferred — you contribute after-tax dollars now, but withdrawals in retirement are tax-free.

For high earners, this changes the cash flow math on catch-up contributions. Plan accordingly.

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7. Tips and Overtime Deductions

Two new above-the-line deductions arrive in 2026:

• Tips: Up to $25,000 for qualified tip income
• Overtime: Up to $12,500 for overtime pay ($25,000 joint)

These are claimed on your 2026 return, which you file in 2027.

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8. Above-the-Line Charitable Deduction

Even if you take the standard deduction, you can now deduct up to:

• $1,000 (single) or $2,000 (joint) in cash charitable contributions

This is new for 2026 tax year returns (filed in 2027). Note: if you're already using Qualified Charitable Distributions from your IRA, the QCD route typically delivers a larger tax benefit.

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What Expires

Several of these provisions are set to expire or phase down by 2029. That makes 2026 through 2028 a particularly important planning window — especially for Roth conversions, tax-loss harvesting, and large charitable gifts.

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Want to Know More? Here's the Truth.

Each of these eight changes has a ripple effect on your overall tax picture — and the interactions between them matter as much as the individual rules. The Senior Bonus Deduction phases out. The SALT cap helps some but not others. The super catch-up window is only four years wide.

Scott Borhauer specializes in building year-by-year retirement tax plans that account for these moving parts — so you're not leaving money on the table during what may be your most valuable planning years.

Not individualized tax or financial advice. Provisions subject to change. Consult a qualified tax advisor for your specific situation.