Experiencing all the changes that modern society throws our way seems to give us rose-colored glasses about the past. Oh, it was a simpler time back then... those were the days! At some point in the future, we will look back on today and think the same thing. However, I am constantly reminded by wise people around me that today is a really wonderful time to be alive. So now I often look at my wife and say, “THESE are the days, Dear!”
Another thing that has reminded me that today is a great time to be alive involves my son and a quest for a ‘project car.’ He is intensely interested in cars as he is 15 and on the cusp of driving. He is a very mechanical kid and has been dragging old mowers and snowblowers home for years from the neighborhood junk days. He fixes them up and gets them working again, and I thought that a fixer-upper car might be a good next step to do together. Of course, our budget is very limited, and we started off by looking at the muscle car era. We did test drive a mid 70s Monte Carlo, and it was so loud we couldn’t even talk to each other. He thought it was awesome. Otherwise, we looked and looked yet mostly found cars that don’t run.
After seriously considering our limited resources and expertise, we decided to confine our searches to the 80s and newer. I’ve realized I like the IDEA of an old car, but maybe not all the fixing up that would need to go into it. There is some disagreement in the family about the whole ‘project car’ idea. Mom claims that he needs to take a turn with the old, dented minivan that has faithfully served all the other kid drivers in our family so far. And when I told my brother what we were up to, he expressed doubts. He told me “I don’t know, Guy. I sure do enjoy my adaptive cruise control, backup camera, heated/cooled seats, Bluetooth for my phone, a nice, smooth ride, and all the other modern amenities in my new truck.” I suppose he is right; THESE are the days! However, against better wisdom, the search for a project car continues.
Even though I’ve seen quite a few years come and go, the holidays and the new year are still exciting. One of my old coaches always said, “Life is just a series of adjustments.” The adjustments of a new year are sometimes financial, and there are a slew of changes for 2026. There are several important numbers that adjust automatically for inflation. For instance, the federal tax ‘standard deduction’ in 2025 for a married couple filing jointly (MFJ) is $31,500. In 2026, that goes up to $32,200. Also, the tax brackets are growing in size, so more of your money will be taxed at lower rates. For instance, the 12% federal tax bracket for married couples (MFJ) tops out at $96,950 in 2025 but grows to over $100,000 of taxable income in 2026. That means $3,000+ more of your income will be taxed in the 12% bracket instead of the 22% bracket next year. I like those types of adjustments! There are many other things happening too.
Note: The 2026 tax year adjustments described apply to tax returns filed in 2027. These are estimated numbers as the true numbers are released by the IRS in late November. Please contact your accountant for personalized tax advice.
Category | 2025 | 2026 |
Annual Gift Exclusion Amount | $19,000 | $19,000 |
Standard Deduction (MFJ) | $31,500 | $32,200 |
If Over 65 | $35,500 | $35,500 |
401(k) Annual Contribution Limits | $23,500 | $24,500 |
If Over 50 | $31,000 | $32,500 |
Ages 60–63 | $31,000 | $35,750 |
IRA/Roth IRA Contribution Limits | $7,000 | $7,500 |
If Over 50 | $8,000 | $8,600 |
Roth Contribution Income Limits (MFJ) | $230,000 | $242,000 |
HSA Contribution Limits – Family | $8,550 | $8,750 |
If Over 55 | $9,300 | $9,750 |
SIMPLE Roth/IRA Contribution Limits | $16,500 | $17,000 |
If Over 50 | $19,500 | $21,000 |
Iowa Tax on Retirement Income* | 0% | 0% |
Iowa Income Tax | 0–3.8% | 0–3.8% |
SS Cost of Living Increase** | 2.5% | 2.8% |
Earnings Subject to SS Payroll Tax | $176,100 | $184,500 |
*Iowa Tax Bill 2023 - https://tax.iowa.gov/tax-provisions
**Social Security Cost of living Adjustment Website - https://www.ssa.gov/news/en/cola/factsheets/2026.html