Helpful Info for This Year’s Taxes

Tackle this year’s taxes with our 2026 Handy Tax Guide, prepared by the CPAs of Dugan + Lopatka. This quick, simple reference has helpful info on current tax rates, deductions, depreciation limits, and more.

For additional guidance, contact our Chicagoland CPAs today.

This guide reflects tax laws in effect as of 1/1/26.

• Individual Income Tax Rates

  Married Taxpayers Filing Jointly or Surviving Spouses

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$24,800	10%
  $24,800	$100,800	12%
  $100,800	$211,400	22%
  $211,400	$403,550	24%
  $403,550	$512,450	32%
  $512,450	$768,700	35%
  $768,700		37%

  Single Taxpayers

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$12,400	10%
  $12,400	$50,400	12%
  $50,400	$105,700	22%
  $105,700	$201,775	24%
  $201,775	$256,225	32%
  $256,225	$640,600	35%
  $640,600		37%

  Heads of Households

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$17,000	10%
  $17,700	$67,450	12%
  $67,450	$105,700	22%
  $105,700	$201,775	24%
  $201,775	$256,200	32%
  $256,200	$640,600	35%
  $640,600		37%

  Estates & Trusts

  Taxable Income Over	But Not Over	Is Taxed At
  $0	$3,300	10%
  $3,300	$11,700	24%
  $11,700	$16,000	35%
  $16,000		37%

  Alternative Minimum Tax

  Tax Rate on AMTI	26% up to	$244,500
  	28% over	$244,500

  	Exemption Amount	Phase-Out Threshold
  Married Filing Jointly	$140,200	$1,000,000
  Married Filing Separately	$70,100	$500,000
  All Individual Tax Payers	$90,100	$500,000

• Deductions & Exemptions

  	Standard Deduction*	Elderly or Blind*
  Married Filing Jointly	$32,200	$1,650
  Single	$16,100	$2,050
  Head of Household	$24,150	$2,050
  Married Filing Separately	$16,100	$1,600
  Dependent of Another	greater of $1,350 or $450 plus sum of earned income

  *You are allowed to deduct the greater of your standard deduction or your itemized deductions.

  Additional Senior Deduction

  $6,000 (all taxpayers). Phases out by 6% of adjusted gross income above $75,000 (single) / $150,000 (married filing jointly).

  Personal Exemptions - Repealed Deduction Limitations

  Section 199A Qualified Business Income Deduction: 20% of domestic qualified business income (multiple limitations apply).

  Medical & Dental Expenses: Excess over 7.5% AGI.

  State & Local Taxes: $40,000 maximum deduction. ($20,200 MFS). The maximum deduction phases down by 30% of the amount of MAGI exceeding $505,000 ($252,500 MFS) until it reaches a floor of $10,000.

  Mortgage Interest Deduction: Limited to $750,000 of principal for post 12/15/17 acquisition indebtedness.

  Charitable Deductions
  • Cash donations to public charity: 60% of AGI
  • Cash donations to private foundation: 30% of AGI
  • Capital gain property donations to public charity: 30% of AGI
  • Capital gain property donations to private foundation: 20% of AGI
  • Overall charitable deduction for itemizers subject to a floor of 0.5% AGI
  • Deduction for non-itemizers – not subject to 0.5% AGI floor
    • Married Filing Jointly: $2,000; All others: $1,000
  Overall Itemized Deduction Limitation

  Itemized deductions are reduced by 2/37 of the lesser of total itemized deductions or the amount by which adjusted gross income (AGI) exceeds the threshold of the start of the 37% tax bracket.

  Other Deductions

  Tip income deduction for qualifying professions: Up to $25,000. Phases out above $150,000 (single) $300,000 (MFJ) AGI.

  Overtime pay deduction: Up to $12,500 (single) / $25,000 (married filing jointly). Phases out above $150,000 (single) $300,000 (MFJ) AGI.

  Car Loan Interest Deduction: Up to $10,000 for U.S.-assembled cars; phases out above MAGI $100,000 (single) / $200,000 (MFJ). This applies only to indebtedness incurred after 12/31/24 and before 1/1/29.

  Gambling losses: Limited to 90% of total losses, up to total gross winnings.

  Deductions Repealed (as of Jan 1, 2018)
  • Miscellaneous itemized deductions
  • Interest on home equity indebtedness not used for real estate improvements.
  • Moving expenses
  Credits

  Tax credits of $2,200 per child and $500 per non-child dependent begin to phase out for taxpayers with modified adjusted gross income exceeding $400,000 for joint and $200,000 for single filers.

• Estimated Tax Payments

  To avoid possible underpayment penalties, you are generally required to pay in through withholding or estimated tax payments the lesser of:

  1. 100% of prior-year tax liability, (110% if AGI >$150,000) or,
  2. 90% of current-year tax liability.
  2026 Estimated Tax Payments for Individuals are due by:
  • April 15, 2026
  • June 16, 2026
  • September 15, 2026
  • January 15, 2027

• Net Investment Income Medicare Surtax

  The net investment income surtax on individuals equals 3.8% of the lesser of:

  • Net investment income*, or
  • The excess, if any, of
  • The individual’s modified adjusted gross income, over the threshold amount.

  Filing Status	Threshold Amount
  Married Filing Jointly	$250,000
  Married Filing Separately	$125,000
  Single, Head of Household	$200,000

  *Common types of “net investment income” include interest, dividends, annuities, royalties, rents, net capital gain on investments, passive activities.

• Capital Gain & Qualified Dividend Tax Rates for Noncorporate Taxpayers

  Single Taxpayer	Married Filing Jointly	Capital Gain Tax Rate*	Net Investment Income Medicare Surtax**	Combined Tax Rate
  $0-$49,450	$0-$98,900	0%	0%	0%
  $49,451-$200,000	$98,901-250,000	15%	0%	15%
  $200,001-$545,500	$250,001-$613,700	15%	3.8%	18.8%
  $545,501	$613,701	20%	3.8%	23.8%

  * Short-term capital gains (held less than 12 months) are taxed at the same rate as ordinary income, gains on collectibles (including metals) are taxed at 28%, recapture gains on real estate are taxed at 25%.

  ** The 3.8% Net Investment Income Medicare surtax only applies to “net investment income” as defined in IRC 1411.

• Estate Tax Rates

  The estate tax and gift tax exemption for 2026 is $15 million. The estate and gift tax rate on amounts in excess of $15 million is 40%. The estate tax exemption is portable between spouses resulting in a $30 million exemption per couple regardless of ownership of assets.

  Illinois estate tax threshold is $4 million (not portable between spouses).

  Annual Gift Tax Exclusion

  Gifts per person, $19,000

  Joint gifts by spouses, $38,000

• Business Provisions

  • Corporate income taxed at a flat rate of 21%.
  • Federal Net Operating Loss deduction limited to 80% of taxable income.
  • Excess business loss limitation: Net business losses from noncorporate taxpayers are limited to a total loss of $512,000 (MFJ) or $256,000 (all others). Excess carries over as NOL
  • Illinois Net Operating Loss deduction limited to $500,000.

• Employment Tax Rates

  Employer	Tax Rate	Wage Base
  Social Security	6.20%	$184,500
  Medicare	+1.45%	No Limit
  	=7.65%
  Employee	Tax Rate	Wage Base
  Social Security	6.20%	$184,500
  Medicare	+1.45%	No Limit
  	=7.65%
  Self Employed	Tax Rate	Wage Base
  Social Security	12.40%	$184,500
  Medicare	+2.90%	No Limit
  	=15.30%

  *Additional 0.9% Medicare tax is imposed on individuals who receive wages or self-employment income in excess of $200,000 ($250,000 for joint return, $125,000 for married filing separate).

• Depreciation/Amortization

  • 3 – Year Assets (200% DB) Dies, molds, small tools
  • 3 – Year Assets (Straight-line) Computer software (if separately stated from hardware)
  • 5 – Year Assets (200% DB) Autos, light-/heavy-duty trucks, computers, typewriters, copiers, medical equipment, construction equipment, wholesale/retail equipment, private aircraft, some manufacturing equipment
  • 7 – Year Assets (200% DB) Most manufacturing equipment, office furniture, printing equipment
  • 15 – Year Assets (Straight-line) Intangible assets including goodwill, going concern value and covenants not to compete. Qualified improvement property
  • 27.5 – Year Assets (Straight-line) Rental houses, apartments, low-income housing
  • 39 – Year Assets (Straight-line) Commercial and industrial buildings, office buildings, shopping centers, warehouses, manufacturing facilities
  Annual Recovery

  Percent of Original Depreciable Basis Under 200% DB Method

  Recovery Year	1	2	3	4	5	6	7	8
  Class
  3 Year	33.33	44.45	14.81	7.41
  5 Year	20.00	32.00	19.20	11.52	11.52	5.76
  7 Year	14.29	24.49	17.49	12.49	8.93	8.92	8.93	4.46

  Section 179 Expense Deduction

  Small Business taxpayers may elect to expense $2.56 million of certain new or used qualifying depreciable property placed in service in tax year 2026. Deduction is phased-out if the cost of qualifying property placed in service during the year exceeds $4.09 million.

  Special (Bonus) Depreciation Allowance

  Bonus depreciation allowance can be claimed for qualified property acquired and placed in service equal to 100% of the cost of the asset.

  Research and Development Costs

  Fully deductible for tax years beginning after 12/31/24.

  2026 Standard Mileage Deductions
  • Business, $0.725 per mile
  • Charitable, $0.14 per mile
  • Medical or moving purposes for qualified active duty members of the Armed Forces, $0.205 per mile

• Retirement Plan Limits

  Individual Limitations

  	Under Age 50	Age 50+	Age 60-63
  IRA	$7,500 (a)	$8,600 (a)	$8,600
  Roth IRA	$7,500 (b)	$8,600 (b)	$8,600
  401(k)/SARSEP Salary Deferrals	$24,500	$32,500	$35,750 (e)
  SIMPLE Plans	$17,000	$21,000	$22,250 (e)

  Profit Sharing Plans
  • Corporate, 100% up to $72,000 (c)
  • SEP – self-employed, 20% up to $72,000 (d)
  • SEP – employee, 25% up to $72,000

  (a) Phaseout for deducting IRA contributions (qualified plan participants):

  • Joint: $129,000 – $149,000 AGI
  • Single or HOH: $81,000 – $91,000 AGI

  (b) Phaseout of Roth contribution eligibility:

  • Joint: $242,000 – $252,000 AGI
  • Single or HOH: $153,000 – $168,000 AGI

  (c) Overall plan is limited to 25% of total compensation of all eligible employees (capped at $360k per employee).

  (d) Of net self-employed income after 1/2 self-employment tax deduction (capped at $360k per employee).

  *401k special catchup contributions for individuals ages 60-63 must be made to a designated Roth account within the plan if your salary exceeded $150,000 in 2025.

• Social Security Benefits

  Maximum earned income limit:

  	Annual	Monthly
  Ages 62-65 years	$24,480	$2,040
  Months before individual reaches age 66	$65,160	$5,430
  Months after age 66	No Limit	No Limit

• Taxable Social Security

  Social Security received is taxable if AGI, plus tax-exempt interest, plus one-half of Social Security received, exceeds these base amounts:

  The taxable amount is the lesser of:
  a. Percent of the excess over the base amount, or
  b. 85% of benefit received

  Base Amount For	50% Over Base	85% Over Base
  Married Filing Jointly	$32,001-$44,000	$44,001+
  Single/Head of Household	$25,001-$34,000	$34,001+
  Married Filing Separately	$0	$0

• Key Terms

  Married Filing Jointly (MFJ)

  Head of Household (HOH)

  Adjusted Gross Income (AGI)

  Modified Adjusted Gross Income (MAGI)

  Net Operating Loss (NOL)