Tax planning often brings a knee-jerk reaction: “I don’t want to pay more taxes.” While understandable, focusing only on this year’s bill can sometimes mean paying more over a lifetime.
More Room Than You May Think
The chart below shows how the income thresholds for the highest and lowest federal tax brackets changed from 1975 through 2025. Those thresholds have risen substantially in nominal dollars, meaning the figures have not been adjusted for inflation. Inflation accounts for part of that increase.
That history provides context, but it doesn’t tell us how much room any particular person has in a tax bracket. For that, we need to look at current rates, taxable income, deductions, and the rest of the financial picture.
Some retirees may have room to recognize additional income at a rate that makes sense for their longer-term plan. Depending on the circumstances, that can create opportunities to consider Roth conversions, capital gain harvesting, and the timing of charitable giving.
Each strategy comes with tradeoffs. Recognizing more income can increase Medicare premiums, make more Social Security benefits taxable, or push capital gains into a higher tax bracket. A taxable Roth conversion creates a current tax cost and cannot be reversed through recharacterization. Its future benefit is uncertain, particularly if you or your heirs later face lower tax rates. Charitable tax benefits also depend on eligibility, deduction limits, and how a gift is made. These decisions deserve an individual review with your tax professional.
Today’s Rates, Your Situation
For 2026, federal ordinary income tax rates range from 10% to 37%. The middle brackets are often more relevant to a planning decision than the highest rate.
| Marginal Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | Up to $12,400 | Up to $24,800 |
| 12% | Over $12,400 to $50,400 | Over $24,800 to $100,800 |
| 22% | Over $50,400 to $105,700 | Over $100,800 to $211,400 |
| 24% | Over $105,700 to $201,775 | Over $211,400 to $403,550 |
| 32% | Over $201,775 to $256,225 | Over $403,550 to $512,450 |
| 35% | Over $256,225 to $640,600 | Over $512,450 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
Source: IRS, tax year 2026 inflation adjustments, October 9, 2025 . These brackets apply to taxable ordinary income after deductions, not gross income. Each rate applies only to income within that bracket. Long-term capital gains and qualified dividends have separate rate schedules. Other filing statuses, state taxes, and additional taxes are not shown.
The 2025 tax law removed the scheduled expiration of the current individual rates. That doesn’t prevent Congress from changing them later, but it does mean there is no automatic rate increase waiting at the end of the current schedule. Historical rates alone don’t tell us whether your future tax rate will be higher or lower.
Planning Across a Lifetime
None of us knows where tax policy will be ten or twenty years from now. Effective planning considers this year’s bill alongside the taxes you may pay throughout retirement and the assets you hope to leave to others.
Sometimes paying taxes strategically today can reduce the taxes you and your heirs pay over the long run.
Whether it does depends on your circumstances, future tax rates, investment results, and how the strategy is carried out. Paying more today does not guarantee paying less overall.
This fall, we’ll revisit your tax strategy as part of your overall financial plan. We’ll consider the timing of income and deductions alongside your cash flow, investment, estate, and charitable goals. The aim is to make thoughtful decisions with the information we have—and leave room to adjust as your life and the rules change.