Tax Rates

2026 tax year — for planning now

Those thresholds are measured against taxable income, not just the gain. A long-term gain that would be taxed at 0% on its own can land in the 15% band because of your salary. This is the single most common reason a sale that “shouldn’t have been taxable” generates a bill.

2026 retirement plan limits

These are the numbers most worth acting on before December 31, and the ones I get asked about most — particularly by physicians with both a W-2 and 1099 income, where a second plan is often available and unused.

The §415(c) figure is the one people miss. It caps everything going into a single plan — your deferrals, the employer match, and profit sharing. If you have a W-2 job and self-employment income on the side, your elective deferral is shared across plans but the §415(c) limit generally is not, which is why a solo 401(k) alongside a hospital 403(b) is often worth setting up. Worth a conversation before year end rather than after.

2026 payroll thresholds

These matter most if you own an entity and run your own payroll, and they are the numbers behind the S-corporation salary question.

The wage base is the reason the S-corporation salary conversation changes shape at higher incomes. Below $184,500, moving a dollar from salary to distribution saves the full 15.3%. Above it, Social Security has already stopped, so the only saving left is the 2.9% Medicare piece — plus the 0.9% additional Medicare tax if you are over those thresholds. It is a real saving, but it is not the number people quote. More on what “reasonable” actually has to mean.

Wage base source: SSA contribution and benefit base. Section 179 figures: Rev. Proc. 2025-32 §4.24.

2025 tax year — for the return you file by April 2026

A note on how to read any of this

Brackets are marginal. Only the income that falls inside a bracket is taxed at that bracket’s rate. A raise that moves you into the 32% bracket does not tax your whole income at 32% — it taxes the portion above that threshold at 32%, and everything below it exactly as before. Your marginal rate is what the next dollar costs, and it is the number that matters for a decision at the edge: an extra shift, a bonus, a conversion. Your effective rate — total tax divided by total income — is always lower, and it is the number that tells you what you actually paid.

If a chart here changes a decision you are about to make, that is a good sign it is worth a conversation first. I wrote about the bracket question in more detail here.

Read out of Rev. Proc. 2025-32 in September 2026. Current for tax years 2025 and 2026. If you are relying on one, confirm it at the source.