By The Tax Shack | November 2026 | Los Angeles & Las Vegas
Every year the IRS adjusts the lines your income gets measured against. A lot of people never see these lines. The ones who do, or have someone watching them for them, tend to pay less.
For 2026, five things changed in ways that affect investors, families, and anyone with a brokerage account.
As with many things, California and Nevada play by completely different rules. The same income, the same investments, the same year, and two residents of those states face a wildly different tax bill.
Here are the five new things to keep in mind, and what they actually mean depending on which state you call home.
1. The Standard Deduction: $16,100 Single / $32,200 Married Filing Jointly
The federal standard deduction went up again for 2026. A married couple earning $90,000 is taxed as if they earned $57,800. The IRS simply doesn't touch that first $32,200. You get it automatically unless you itemize, and most families never itemize.
California: California does not conform to the federal standard deduction. For 2026, California's standard deduction is just $11,800 for married filing jointly — compared to the federal $32,200. That $20,400 gap means a California couple effectively starts paying state income tax on $20,400 more of their income than the IRS would touch. California adjusts its deduction for inflation, but at a fraction of the federal pace — the gap has widened significantly over time. Californians are running two separate deduction calculations every year, and the state number is far less generous.
Nevada: Nevada has no state income tax. The federal deduction is the only one that matters.
Sources: IRS Rev. Proc. 2024-40; California FTB 2026 indexed amounts
2. The 0% Long-Term Capital Gains Bracket: Up to $49,450 Single / $98,900 Married
If you've held a stock, fund, or property for more than a year before selling, you qualify for long-term capital gains rates. For 2026, if your taxable income stays below $49,450 (single) or $98,900 (married filing jointly), the federal tax on those gains is 0%. Not reduced… zero.
Your wages fill the bracket first. A couple with $80,000 of taxable wages has $18,900 of room left at 0%. Add the $32,200 standard deduction, and a couple can earn up to $131,100 in total (wages and gains combined) and still owe nothing federally on those long-term gains.
California: California taxes all capital gains as ordinary income. There is no preferential rate and no 0% bracket for capital gains at the state level. A California couple below the federal $98,900 threshold pays $0 federal on their long-term gains and up to 9.3% to California on the exact same amount. For higher earners, California's top marginal rate on capital gains is 13.3%.
Nevada: No state income tax. The 0% federal bracket means 0% total for federal and state.
Sources: IRS Rev. Proc. 2024-40; California Revenue and Taxation Code §18151; Tax Foundation, "California's Capital Gains Tax"
3. The 3.8% Net Investment Income Tax: Kicks In at $200,000 Single / $250,000 Married
Once your income crosses $200,000 (single) or $250,000 (married), the IRS adds a 3.8% Net Investment Income Tax (NIIT) on investment income. That’s dividends, interest, capital gains, and rental income. These thresholds have not been adjusted for inflation since 2013, which means more people cross them every year as wages rise.
The tax only applies to the smaller of two amounts: your net investment income, or how far your income went over the line. A single filer at $210,000 with $50,000 of gains pays 3.8% on $10,000, not $50,000. That's a $380 bill instead of $1,900.
California: The NIIT is a federal tax only. But California's 13.3% top marginal rate on investment income applies on top of it for high earners. A California resident in the top bracket crossing the NIIT threshold can face 23.8% federal (20% long-term gains rate + 3.8% NIIT) plus 13.3% California for a combined 37.1% rate on investment income.
Nevada: No state income tax. The 3.8% NIIT applies at the federal level only.
Sources: IRC §1411; IRS Publication 550; Tax Foundation, "State Individual Income Tax Rates 2025"
4. Age 65 or Older: Up to an Extra $6,000 Deduction
Taxpayers 65 or older get an additional standard deduction on top of the regular one. For 2026, that's up to $6,000 per qualifying person. A married couple where both spouses are 65 or older can deduct up to $12,000 more than the standard deduction alone.
The additional deduction begins phasing out above $75,000 for single filers and $150,000 for married couples, so where your income lands determines how much of it you keep.
California: California doesn't add to the standard deduction for seniors at all. Instead, it offers a nonrefundable senior exemption credit — roughly $153 per qualifying person for 2025, around $158 for 2026. To put the gap in plain numbers: a married couple where both spouses are 65 or older can deduct up to $12,000 more from federal income. California gives each of them a ~$158 credit against their state tax bill. The structures are so different they're barely comparable, and California's version is far smaller in real dollar terms.
Nevada: No state income tax. The federal senior deduction is the only calculation that matters.
Sources: IRS Rev. Proc. 2024-40; California FTB 2026 indexed amounts; California FTB Form 540 Instructions
5. Gold and Silver: Long-Term Gains Can Face a Maximum 28% Rate
This one catches people who thought they were playing it safe. Physical gold and silver held as investments are classified as collectibles by the IRS. These are not capital assets the way stocks or real estate are. That classification carries a maximum long-term capital gains rate of 28%, not the standard 15% or 20% most investors expect.
The top rate on a long-term stock gain is 20%. The same gain on gold can reach 28%. That 8-point gap comes from the same tax code that sets all five of these lines.
California: California treats collectibles gains the same as any other income, which are taxed at ordinary income rates, up to 13.3%. A California resident selling gold at the 28% federal collectibles rate also pays up to 13.3% California, for a potential combined rate of 41.3%.
Nevada: No state income tax. Federal rates apply only.
Sources: IRC §1(h)(4); IRS Publication 544; California Revenue and Taxation Code §18151
The Big Picture
The IRS publishes these numbers every fall. What they tend not to tell you is where your income should land relative to each one. The decisions you make before December 31 determine the answer.
Which account holds an asset. When you sell. Whether gains are long-term or short-term. Whether you're sitting in a 0% bracket with room to harvest gains tax-free, or about to cross a threshold that adds 3.8% to a bill you weren't expecting.
These are choices. The families who pay less plan them before the year ends.
If you're in California, you're running two calculations every time. California rarely gives you the break the federal code does. If you're in Nevada, you're working with the cleanest tax environment in the West, and there are still moves to make.
The Tax Shack works with investors and business owners in Los Angeles and Las Vegas year-round, not just at filing time. If any of these numbers apply to your situation, schedule a strategy review with our team before year-end.
The Tax Shack is a tax preparation and advisory firm serving clients in Los Angeles and Las Vegas. Staff are CTEC-certified tax professionals. This post is for informational purposes only and does not constitute tax advice. Consult a tax professional regarding your specific situation.