2026 Tax Brackets: Income, Capital Gains, and What Retirees Need to Know

The IRS released the official 2026 tax figures in Revenue Procedure 2025-32. These brackets apply to income you earn during 2026 and will be reported on the return you file in early 2027.

Below are the numbers that matter most for retirement planning: ordinary income brackets, the standard deduction, and long-term capital gains thresholds. Bookmark this page. We reference these figures constantly when building retirement income plans, because where your income lands in these brackets often matters more than how much of it you have.

2026 Federal Income Tax Brackets

The seven rates are unchanged: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Only the income thresholds moved, rising roughly 2.7% for inflation. These rates apply to taxable income, which is your gross income minus your deduction.Remember that brackets are marginal. A married couple with $250,000 in taxable income does not pay 24% on all of it. They pay 10% on the first $24,800, 12% on the next portion, and so on. Only the dollars above each threshold get taxed at the higher rate. Your effective rate is always lower than your top marginal rate.

2026 Standard Deduction

Additional deduction for age 65+: Seniors may claim an extra $2,050 (single) or $1,650 per qualifying spouse (married filing jointly). On top of that, taxpayers 65 and older may claim an additional $6,000 senior deduction, which phases out for income above $75,000 (single) or $150,000 (joint).

For a married couple both over 65, that stacking matters. Their base standard deduction of $32,200 plus the age-65 additions can meaningfully reduce taxable income before a single dollar is taxed.

2026 Long-Term Capital Gains Brackets

This is the table most retirees overlook, and it is often the most valuable one in the entire article.

Long-term capital gains (assets held more than one year) are taxed at 0%, 15%, or 20%, on a completely separate schedule from ordinary income.

Head of household filers qualify for the 0% rate up to $66,200.

Read that 0% row again. A married couple can have up to $98,900 in taxable income and pay nothing in federal tax on their long-term capital gains. Not a reduced rate. Zero.

That is why the order in which you withdraw from your accounts matters enormously in retirement, and why a brokerage account can be one of the most tax-efficient places to draw from in your early retirement years.

One caution: these thresholds are based on your total taxable income, not just your gains. Your Social Security, IRA withdrawals, pension income, and the gains themselves all count toward the number that determines your rate.

The 3.8% Net Investment Income Tax

Above $200,000 (single) or $250,000 (married filing jointly) in modified adjusted gross income, an additional 3.8% Net Investment Income Tax applies to investment income, including capital gains.

Unlike the brackets above, these thresholds are not indexed for inflation. They have been frozen since 2013, which means each year more households cross into them without any real increase in purchasing power. For a high earner in the 20% bracket, the effective federal rate on long-term gains reaches 23.8%.

Why These Numbers Drive Your Retirement Income Plan

Most retirees think about taxes once a year, in April. That is exactly backwards.

The brackets above are not just a bill you receive. They are a set of targets you can plan around, and the difference between planning around them and ignoring them can be worth tens of thousands of dollars over a retirement.

A few examples of what this looks like in practice:

• Withdrawal order matters. Pulling from a brokerage account, a traditional IRA, and a Roth in the right sequence can keep your taxable income under the 0% capital gains threshold in the years it counts. Pulling in the wrong order can push you into the 15% or 22% band for no reason. This is the core of our Staging and Laddering strategy.
• RMDs are a tax event you can see coming. Required minimum distributions at 73 can force taxable income into a higher bracket whether you need the money or not. Planning in your 60s changes what that looks like in your 70s.
• Roth conversions have a bracket ceiling. Converting exactly enough to fill a bracket, and not a dollar more, is a strategy. Converting blindly is not.
• Gross income is not spendable income. A $132,000 gross retirement income can net closer to $109,000 after federal taxes and the taxable portion of Social Security. That gap is why so many people with $2 million saved still feel unable to spend freely.

How We Help

At KCIIS, tax-efficient income planning is not an add-on. It is a main focus of the plan.

When we build a retirement strategy, we map your income sources against these exact brackets to determine which account to draw from first, how to keep more of your gains in the 0% bracket, how to manage RMDs before it’s too late, and where guaranteed income from a Hybrid Pension fits into the picture.

We compare over 50 plans across all 50 states, and our consultations are free. We are paid directly by the insurance carriers, so there is no cost to you.

Schedule a free consultation with our licensed advisory team at KCIIS today.