Recent tax law changes create new planning opportunities—but only for those who understand how the rules apply to them. There have been several bills introduced in recent years that affect how individuals and families plan for taxes moving forward. Some of these changes went into effect in 2025 with the passing of the One Big Beautiful Bill Act (OBBBA), with additional provisions scheduled to take effect in 2026. Below are several notable updates and why they may matter for your financial plan.
Required Roth Catch-Up Contributions
One of the most significant changes impacts retirement savers age 50 and older. Beginning in 2026, individuals who earned more than $150,000 in the prior year will be required to make any “catch-up” contributions to employer retirement plans, such as 401(k) or 403(b) plans, on an after-tax (Roth) basis.
Participants will still be able to contribute up to the elective deferral limit of $24,500 on a pre-tax or Roth basis. However, the catch-up contributions of up to $8,000, or $11,250 for those age 60 to 63 by the end of 2026, must be made to Roth accounts.
For those contributing to a Roth account through an employer retirement plan who do not currently hold assets in a Roth IRA, it may be worth considering a Roth IRA contribution or conversion. Doing so can help accelerate eligibility for taking tax-free withdrawals from Roth assets in retirement.
New Deductions Available for Non-Itemizers
Since the passing of the Tax Cuts and Job Acts in 2017, which roughly doubled the standard deduction, most Americans have not benefited from itemizing deductions. The OBBBA introduces several new deductions for the roughly 90 percent of taxpayers who now take the standard deduction.
