What is happening to tax policies in 2026? Countless changes are happening, or at least being proposed, to the point of some slight panic among America’s beloved taxpayers. You’re here doing research instead of acting rashly, and that’s a great start. As a reward, we’re going to introduce you to effective tax strategies and expert insights on the Roth TSP as a potential solution for your federal retirement plan in 2026. Learn more and protect your assets when you reach out to Federal Educators!
Predicted Changes For 2026 (And How This Affects Your Taxes)
You may have heard about the Tax Cuts and Jobs Act (TCJA) because it saved you a great deal of money on taxes. This single act raised the standard tax deduction and decreased income tax rates, among other things. The TCJA helped many taxpayers during inflation since the tax year 2018. Now the One Big Beautiful Bill (OBBB) is here, and many filers might be saying goodbye to some benefits, but they could also still be hanging on to others.
After the TCJA expires by the 2026 tax year, here’s what you could be seeing:
- Tax brackets will go back down
- The standard deduction could fluctuate
- The State and Local Tax (SALT) deduction may revert
- The Qualified Business Income (QBI) deduction will remain unchanged
- Estate and gift tax exemptions will be extended
With some good news and some bad, this major change will affect each and every taxpayer in a completely different way. Know where you stand and explore strategies that best fit your goals.
Recommended Tax Strategies to Combat the Fluctuating Landscape
Here are some of the most effective tax strategies that people are considering in response to the recent tax policy changes:
- Maximizing tax-advantaged savings accounts
- Harvesting capital gains
- Prioritizing mortgage and SALT deductions
- Optimizing charitable gift giving
- Taking advantage of Roth conversions
Read more > How Can I Save Money On Taxes As A Federal Employee?
Managing Your TSP In 2026 (Are Roth TSPs Worth It?)
Let’s delve into the last item on our list. The Thrift Savings Plan (TSP) has served as a reliable method of retirement savings for decades. To continue being a safe investment plan for many, the TSP is adapting to these recent changes with new in-plan Roth conversions starting in 2026.
With a Roth TSP, you will be able to:
- Easily convert your TSP funds into Roth TSP funds
- Make after-tax contributions
- Withdraw from your funds tax-free
- Avoid required minimum distributions (RMDs)
This is a tax strategy that we highly recommend to federal employees who are looking for new ways to contribute to their federal employee retirement plan in response to the sunsetting of TCJA provisions.
Learn more > 2025 TSP Comparison: Roth vs Traditional For Federal Employees
Play It Smart and Learn More About Roth TSPs From Your Trusted Advisors at Federal Educators
Ready to take action against the impending tax changes for 2026? Start with a Federal Educators Thrift Savings Plan overview and call (813) 568-1212 to get in touch with qualified federal benefits advisors who can help you fine-tune your federal retirement investment strategy!