The IRS has released its annual inflation adjustments for the 2026 tax year, outlining changes to federal income tax brackets, the standard deduction, and more than 60 other provisions. These adjustments, made each fall, help ensure taxpayers aren’t pushed into higher tax brackets simply because of inflation — a phenomenon known as “bracket creep.”
Updated Standard Deductions
Alongside bracket adjustments, the IRS increased standard deductions for 2026:
- Married couples filing jointly: $32,200
- Heads of households: $24,150
- Single filers and married individuals filing separately: $16,100
Seniors may also see additional relief thanks to a new provision in the One, Big, Beautiful Bill Act (OBBBA), which provides a temporary tax deduction of up to $6,000 for individuals aged 65 and older. This deduction is available to single filers earning $75,000 or less, or couples earning $150,000 or less, and will remain in effect through 2028.
2026 Tax Brackets for Married Couples
Married Filing Jointly Tax Brackets | 2025 | 2026 |
10% | $0 – $23,850 | $0 – $24,800 |
12% | $23,851 – $96,950 | $24,801 – $100,800 |
22% | $96,951 – $206,700 | $100,801 – $211,100 |
24% | $206,701 – $394,600 | $211,401 – $403,550 |
32% | $394,601 – $501,050 | $403,551 – $512,450 |
35% | $501,051 – $751,600 | $512,451 – $768,700 |
37% | $751,601 and up | $768,701 and up |
2026 Tax Brackets for Single Filers
Single Filers’ Tax Brackets | 2025 | 2026 |
10% | $0 – $11,925 | $0 – $12,400 |
12% | $11,926 – $48,475 | $12,401 – $50,400 |
22% | $48,476 – $103,350 | $50,401 – $105,700 |
24% | $103,351 – $197,300 | $105,701 – $201,775 |
32% | $197,301 – $250,525 | $201,776 – $256,225 |
35% | $250,526 – $626,350 | $256,226 – $640,600 |
37% | $626,351 and up | $640,601 and up |
Key Updates to Tax Credits and Exemptions
Earned Income Tax Credit (EITC):
Families with at least three children can now claim a maximum EITC of $8,231, up from $8,046 for 2025.
Estate Tax Credits:
Estates of individuals who pass away in 2026 will have a basic exclusion amount of $15 million, an increase from $13.99 million for those who died in 2025.
Health Flexible Spending Accounts (FSAs):
Employees can contribute up to $3,400 to their FSAs in 2026, a $100 increase from 2025.
Understanding Progressive Taxation
While many Americans focus on their “tax bracket,” it’s important to remember that the U.S. tax system is progressive — meaning higher rates apply only to portions of income that exceed specific thresholds.
For example, a married couple earning $150,000 would subtract the 2026 standard deduction of $32,200, leaving $117,800 in taxable income. Their top marginal tax rate would be 22%, but their effective tax rate — the actual percentage paid across all income brackets — would be closer to 13%.
The One, Big, Beautiful Bill Act: Making the 2017 Tax Cuts Permanent
Signed into law by President Trump in July, the One, Big, Beautiful Bill Act (OBBBA) made many of the 2017 Tax Cuts and Jobs Act provisions permanent, preventing the automatic expiration of lower tax rates that were set to sunset in 2026.
According to analysis from the Tax Foundation, the typical filer could see an average tax cut of $3,752 in 2026 under the OBBBA. However, the benefits vary significantly by income level:
- Households in the bottom quintile (earning up to $34,600) will save about $150 in 2026, or 0.8% of their income.
- Households in the top quintile (earning $217,101 or more) will save about $12,540, or 2.5% of their income.
A Note on the IRS Furlough
The IRS also announced an agency-wide furlough beginning October 8, due to a lapse in federal appropriations from the government shutdown. Despite the closure, taxpayers with an October 15 extension deadline are advised to file as planned.
According to the agency:
“Taxpayers should continue to file, deposit, and pay federal income taxes as they normally would; the lapse in appropriations does not change Federal Income Tax responsibilities.”
The Bottom Line
The IRS’s 2026 tax inflation adjustments offer moderate relief for many taxpayers, particularly middle-income earners who have seen bracket thresholds rise after several years of inflation. Combined with the One, Big, Beautiful Bill Act’s permanent tax cuts and new senior deduction, next year’s filing season may look slightly brighter for many households — though the benefits will continue to scale with income.
As always, taxpayers are encouraged to review their financial plans ahead of the new tax year to understand how these changes may impact their overall liability and investment strategies.
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