Navigating Tax Changes in 2026: What High-Net-Worth Individuals Need to Know

Key Tax Changes for 2026

The new tax year brings several important changes that may impact high-net-worth individuals and families. Here’s what you need to know and how to prepare.

Retirement Account Updates

Increased Contribution Limits:

• 401(k) elective deferral: $23,500 (up from $23,000)
• IRA contribution limit: $7,000 (unchanged)
• Catch-up contributions (age 50+): $7,500 for 401(k), $1,000 for IRA

Required Minimum Distributions:

• The SECURE 2.0 Act continues its phased increase of the RMD age. Individuals turning 73 in 2026 must begin taking distributions.
• New for 2026: Roth accounts in employer plans are no longer subject to RMDs during the account owner’s lifetime.

Estate and Gift Tax

• The federal estate tax exemption remains elevated at approximately $13.99 million per individual for 2026
• Critical planning note: The elevated exemption is scheduled to sunset after 2025 under current law, but legislative action in late 2025 extended it through 2026. Clients with estates approaching this threshold should review their planning immediately.
• Annual gift tax exclusion: $19,000 per recipient (up from $18,000)

Capital Gains Considerations

• Long-term capital gains rates remain at 0%, 15%, and 20% based on income thresholds
• The Net Investment Income Tax (NIIT) of 3.8% continues to apply to higher-income taxpayers
• State-level capital gains taxes vary — New York clients should be aware of the combined federal/state rate exceeding 30%

Strategic Recommendations

1. Roth Conversion Planning

With tax rates potentially rising in future years, 2026 may represent an opportune window for Roth conversions. We recommend analyzing your projected income to identify conversion amounts that keep you within favorable brackets.

2. Charitable Giving Optimization

Consider bunching charitable contributions using a donor-advised fund to maximize itemized deduction benefits in alternating years.

3. Estate Plan Review

Given the uncertainty around the estate tax exemption sunset, all clients with estates exceeding $7 million should schedule an estate plan review.

4. Tax-Loss Harvesting

Our team continuously monitors portfolios for tax-loss harvesting opportunities. If you hold concentrated positions with significant unrealized gains, ask your advisor about systematic diversification strategies.

Next Steps

Contact your Meridian advisory team to schedule a tax planning session. We recommend completing your 2026 tax projection by the end of Q1 to maximize planning opportunities.

This article is for informational purposes only and does not constitute tax advice. Consult with a qualified tax professional regarding your specific situation.