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As we approach the end of 2025, individual taxpayers face a perfect storm of policy changes that could significantly increase their tax burden in 2026. Two major developments—the expiration of enhanced ACA premium tax credits and the newly announced Social Security wage base—are poised to impact millions of Americans.

ACA Changes and the Government Shutdown: A Costly Combination

At the heart of the ongoing federal government shutdown is a battle over the Affordable Care Act’s enhanced premium tax credits. These credits, expanded during the pandemic, have helped over 24 million Americans afford health insurance through the ACA marketplace. Unless Congress acts, they will expire at the end of 2025.

Without these enhanced subsidies:

• Premiums are expected to more than double, rising from an average of $888 to $1,904 annually.
• Households earning above 400% of the federal poverty level—$62,600 for individuals or $128,600 for a family of four—will lose eligibility for any subsidies.
• Middle-income families and early retirees will be hit hardest, with some facing premium hikes of over $18,000 annually.

States like Illinois and Kentucky are bracing for tens of thousands of residents to become uninsured. While some states are exploring their own marketplaces or supplemental aid, most lack the infrastructure or budget to fully offset the loss of federal support.

Social Security Wage Base Increase: A Hidden Tax Hike

The Social Security Administration has announced that the 2026 wage base will rise to $184,500, up from $176,100 in 2025. This means:

• Employees and employers will each pay up to $11,439 in Social Security tax, an increase of $521 per party.
• Self-employed individuals will pay 12.4% on income up to $184,500, plus Medicare taxes, making this a significant increase in payroll tax liability.

Why Tax Planning Matters Now More Than Ever

These changes—combined with inflation, rising medical costs, and uncertainty around other federal provisions—make 2025 year-end tax planning essential. Whether you’re self-employed, approaching retirement, or managing a family business, proactive strategies can help you:

• Minimize unexpected tax liabilities
• Optimize health insurance decisions
• Prepare for payroll tax increases
• Adjust income to preserve ACA subsidy eligibility

Choose the Right Tax Planning Package for You

At Rincon Controller and Tax Services, Inc., we offer three levels of tax planning packages tailored to fit your needs—from basic reviews to comprehensive strategy sessions. Whether you’re looking for a quick check-in or a deep dive into your financial future, there’s a plan designed for you.

📅 Reserve your spot today to ensure you’re prepared for the changes ahead and positioned for success in 2026.