Introduction: Permanent Tax Law Shifts Mean It’s Time to Plan Smarter
Tax law has changed — and for the better. With major reforms like the OBBA Act removing the uncertainty around estate and gift tax thresholds, high-net-worth individuals, retirees, and business owners now have a clearer planning runway.
The IRS, through Rev. Proc. 2025-32 and related guidance, has confirmed key inflation-adjusted figures for 2026. This guide walks you through all of it — and more importantly, offers strategic insights from the Hidden Tax Secrets Guide to help you make confident moves.
Looking for a deeper dive? Request the Hidden Tax Secrets Guide — our exclusive resource for clients who want to go beyond compliance and start planning with purpose.
2026 Federal Tax Highlights at a Glance
Estate, Gift, and GST Exemption: Permanently Set at $15 Million
Thanks to legislative updates like the OBBA Act, the estate, gift, and generation-skipping transfer (GST) exemption is now permanently set at $15 million per individual (or $30 million per couple), subject to annual inflation indexing.
This amount is no longer scheduled to sunset or revert under the previous TCJA framework. This clarity gives families and estate planners long-term confidence in deploying trusts, gifting strategies, and other advanced planning tools.
Annual Gift Tax Exclusion
The annual gift tax exclusion remains at $19,000 per recipient for 2026. This exclusion allows for systematic wealth transfers without affecting the lifetime exemption or triggering gift tax reporting (unless exceeded).
Married couples can gift up to $38,000 per beneficiary, making this an efficient tool for family-based giving or 529 plan contributions.
Non-Citizen Spouse Exclusion
The gift tax exclusion for non-citizen spouses increases to $194,000 in 2026. This unique limit ensures that cross-border couples can still engage in meaningful tax-free transfers while maintaining compliance.
Updated 2026 Federal Income Tax Brackets
Here’s how the brackets shake out for 2026:
| Tax Rate | Single Filers | Married Filing Jointly |
| 37% | Over $640,600 | Over $768,700 |
| 35% | Over $256,225 | Over $512,450 |
| 32% | Over $201,775 | Over $403,550 |
| 24% | Over $105,700 | Over $211,400 |
| 22% | Over $50,400 | Over $100,800 |
| 12% | Over $12,400 | Over $24,800 |
| 10% | Up to $12,400 | Up to $24,800 |
Planning Opportunity: If you’re nearing retirement or in a low-income year (e.g., post-exit or pre-RMD), you may want to consider a Roth conversion strategy to “fill up” the 22% or 24% brackets and lock in today’s rates.
AMT (Alternative Minimum Tax) Updates
- Single Exemption: $90,100
- Joint Exemption: $140,200
- Phase-outs begin at: $500,000 (single) and $1,000,000 (married)
High-income earners with incentive stock options (ISOs), large deductions, or substantial municipal bond interest should model for potential AMT exposure.
Expanded Tax Credits You Shouldn’t Miss
Adoption Credit
The maximum adoption credit rises to $17,670 for 2026. This can offset federal tax liability for families expanding through adoption.
Employer-Provided Childcare Credit
The ceiling increases to $500,000, or $600,000 for small businesses, offering significant tax leverage for companies supporting working parents.
Flexible Spending & Medical Accounts
Health FSAs
- Contribution cap: $3,400
- Carryover amount (if allowed): $680
MSAs (Medical Savings Accounts)
Self-Only Coverage:
- Deductible range: $2,900 – $4,400
- Max out-of-pocket: $5,850
Family Coverage:
- Deductible range: $5,850 – $8,750
- Max out-of-pocket: $10,700
These plans offer strategic ways to reduce taxable income while preparing for health-related expenses.
529 Plans: More Than Just College Savings
Tax-free growth. Estate reduction. Creditor protection. The humble 529 plan is doing a lot of heavy lifting in 2026.
Strategic Uses:
- Superfunding Strategy: Contribute up to $95,000 per beneficiary using the 5-year gift election rule. File a gift tax return but avoid triggering gift tax.
- Expanded K-12 Uses: Withdraw up to $20,000 per year tax-free for eligible private school expenses.
- Roth IRA Rollover: Starting in 2024, up to $35,000 of unused 529 funds can be rolled into a Roth IRA for the beneficiary — no penalties, no taxes, as long as:
- The account has been open 15+ years
- Contributions were made 5+ years prior
- Rollovers stay within annual Roth limits
In Florida, 529 plans are generally protected from creditors for both the owner and the beneficiary — a major bonus in estate and asset protection planning.
Florida Residency Planning for Snowbirds & Movers
If you’re moving to Florida for tax reasons, the IRS — and your old state — want proof. Here’s what matters:
- File a Declaration of Domicile
- Get a Florida driver’s license
- Register to vote in Florida
- Apply for Homestead Exemption
- Join Florida-based social groups
- Update your legal docs to Florida versions
- Open Florida bank accounts
- Spend at least 183+ days in Florida
Failing to sever ties with your former state could trigger audits or tax challenges. Don’t assume — document everything.
SALT Cap: Still Capped at $10,000 and Made Permanent
The $10,000 cap on state and local tax (SALT) deductions is now permanent and continues to limit the tax benefit of itemizing for high earners in states like NY, NJ, CA, and IL.
Tip from the Hidden Tax Secrets Guide: Use Donor-Advised Funds (DAFs) to front-load charitable giving and counteract the SALT deduction cap.
Advanced Strategies from the Hidden Tax Secrets Guide
This isn’t your average IRS summary. The Hidden Tax Secrets Guide outlines the tools the wealthiest families are using — many legally hidden in plain sight.
- Roth Conversion Timing
Convert IRA funds during low-income years to maximize long-term tax-free growth.
- Estate Freezing with GRATs and SLATs
Lock in current values and shift appreciation out of your estate tax-free.
- HSAs as a Triple-Tax Shelter
Contribute, grow, and withdraw — all tax-free when used correctly.
- Tax-Gain Harvesting
Realize gains in low-bracket years to reset cost basis without incurring tax.
- Employing Family Members
Shift income to kids in lower tax brackets — funding Roth IRAs or 529s along the way.
Request the Hidden Tax Secrets Guide
Want a copy of the full Hidden Tax Secrets Guide? ClicK here
It includes:
- Proven strategies used by multi-generational families
- Year-by-year tax planning timelines
- Real-world examples and trust structures
- Asset protection and income shifting tactics
Get your complimentary copy today by clicking here or by replying to this post
Final Word
2026 may not bring massive changes — but it brings massive opportunities. With permanent thresholds, IRS clarity, and the power of compounding tax advantages, smart planning now can yield lifelong savings.
Want to go deeper or implement a customized tax plan? We’re here to help — and we’ve got the experience to back it up.
Let’s build a stronger, smarter plan together.
Schedule your free consultation today
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Contact AWM today to schedule a confidential consultation and connect with an advisor who can help you achieve your financial goals. For assistance, reach out to us at Service@awmfl.com.
Thank you for your continued trust and engagement.
Tony Gomes, Author, MBA
CEO and Founder
Advanced Wealth Management
Content Disclosure: The information here is general and educational. It is not a substitute for professional advice and does not constitute a recommendation. Forecasts and opinions are subject to change.