New Year, New Tax Laws 

Champagne, football, pork and sauer­kraut, and tax changes – each a hallmark of the new year.  As 2026 begins, two important tax law updates deserve your attention as you plan for the year ahead: 

1. Chari­table Deduc­tions for Non-Itemizers 

2. Mandatory Roth Catch-up contributions 

Under­standing how these changes may affect your overall strategy is key to maintaining tax efficiency. Proac­tively seizing new oppor­tu­nities and avoiding costly mistakes can signif­i­cantly impact your long-term financial goals. 

Charitable Deductions for Non-Itemizers 

One provision in the One Big Beautiful Bill (OBBBA), passed last summer, added an above-the-line deduction for chari­table contri­bu­tions.  Beginning in 2026, any cash gifts made to a public charity will be deductible regardless of whether you itemize deductions. 

But keep in mind the following limitations: 

• Deduction is limited to $1,000 for single filers and $2,000 for couples filing jointly. 

• The gift must be cash. Appre­ciated stock and other non-cash gifts do not qualify. 

• The recipient must be a public charity.  Donor Advised Funds and private founda­tions are not eligible. 

If you’ve fallen out of the habit of saving chari­table letters and receipts, consider this your reminder to keep track of those for the new year! 

Mandatory Roth Catch-up Contributions for High Earners

This provision was passed in 2022 as part of the SECURE Act 2.0 legis­lation.  However, the imple­men­tation was not made effective until this year (2026).  If you partic­i­pated in a 401(k) or 403(b) plan and you earned more than $150,000 from your employer last year, your catch-up contri­bu­tions are no longer eligible to be made on a pre-tax basis.  Instead, they must be made on an after-tax Roth basis.  See the chart below for how this may impact you. 

	Regular	Catch- up (over 50)	Super Catch-up (60–63)
Limit	$       24,500.00	$       8,000.00	$             3,250.00
Tax Treatment	Roth or Pre-tax	Roth	Roth

If you have been maximizing pre-tax contri­bu­tions, consider increasing your income tax withholding from your paycheck.  For example, an extra $8,000 of reportable income at the 22% tax bracket could result in an extra $1,760 in 2026 tax liability.  Of course, this may not be a bad thing, as there are signif­icant long-term benefits of Roth contri­bu­tions. Here are a few other things to be aware of regarding this new rule: 

• The rule only applies to catch-up contri­bu­tions.  High earners can still make pre-tax contri­bu­tions up to the regular 2026 limit of $24,500. 

• The rule only applies to employees who earned more than $150,000 in the previous year with the same employer.  If you did not earn more than $150,000 last year or started a new job with a new employer in 2026, the rules do not apply. 

• If the plan does not offer a Roth option, high earners are not permitted to make any catch-up contributions. 

Looking Ahead

You may also want to refresh your memory on major tax changes that took effect last year, as they may have an impact on your 2025 tax liability.  You can read more about them here.

Once again, these tax law changes highlight the ever-evolving nature of retirement planning.  A compre­hensive financial plan – empha­sizing tax efficiency in every step – is essential to making the most of your hard-earned savings.  Don’t hesitate to give us a call if you have questions on how new tax laws may impact your retirement journey.  Here’s to another year of Tax Planning!