How 2026 Sunset Laws will impact your tax cuts – Federal Employee Tax Planners
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2026 Sunset Laws

How 2026 Sunset Laws will impact your tax cuts

Back in December 2017, the government rolled out the Tax Cuts and Jobs Act (TCJA). The Act reduces your individual tax rate. This change lowers your income tax burden over the course of 8 years and enables you to boost savings.

Unless Congress votes to extend the TCJA, 2017 tax rates will go back into effect on January 1, 2026, For example:

  • 12% tax rate goes back up to 15%
  • 22% tax rate goes back up to 25%
  • 24% tax rate goes back up to 28%

The key to making the most of the TCJA tax benefits before they end, or sunset, is to first understand your current tax bracket and associated marginal tax rate vs. the tax bracket you anticipate at your planned retirement age. 2026 Sunset Laws

2026 retirees

If you’re planning to retire in 2026 or later, you could end up paying more in taxes. As a reminder, your FERS basic benefit and Social Security monthly payments will become taxable income when you retire, along with any withdrawals from your traditional TSP. This means you’ll be paying more in taxes and have less money in your pocket.

Thinking ahead

No matter where you are currently at on your career path, it’s never a bad time to review your target retirement age to see if you’re still on track. In doing so, you can reassess your current approach to saving and tax planning. It’s especially helpful if your income or retirement accounts changed over the last six months.

A little strategic planning today can generate positive financial returns for years down the road.

Not sure if your current plan is working best for you?

At Federal Employee Tax Planners, we offer customized tools to help you achieve your retirement savings goals.

Send us an email at benefits@fedtaxplanners.com, or give us a call at 877-617-3377 to connect with one of our Federal Benefit Consultants today.