Every fall, the IRS adjusts its tax brackets, standard deductions, and dozens of other thresholds to account for inflation. For 2026, those adjustments average around 2.7% — and they're layered on top of significant permanent changes made by the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The result is a tax landscape that looks similar to 2025 on the surface but has important differences underneath.
Here's a complete, plain-English guide to what changed for the 2026 tax year (returns you'll file in early 2027).
The 2026 Federal Tax Brackets
The seven federal income tax rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — remain unchanged. What shifted are the income ranges that fall into each bracket. The OBBBA made these rates permanent, ending years of uncertainty about whether the lower rates from the 2017 Tax Cuts and Jobs Act would expire.
For single filers, the 2026 brackets are:
- 10%: $0 – $11,925
- 12%: $11,926 – $48,475
- 22%: $48,476 – $103,350
- 24%: $103,351 – $197,300
- 32%: $197,301 – $250,525
- 35%: $250,526 – $626,350
- 37%: Over $626,350
For married filing jointly, the thresholds are roughly double the single-filer amounts, with the 37% bracket beginning above $751,600.
The modest 2–4% increase in bracket thresholds means your income can rise slightly without pushing you into a higher rate — a protection against what economists call "bracket creep."
The 2026 Standard Deduction
The standard deduction — the amount you can subtract from your income before calculating taxes without needing to itemize — increased for all filing statuses:
- Single filers: $16,100 (up from $15,750 in 2025)
- Married filing jointly: $32,200 (up from $31,500 in 2025)
- Head of household: $24,150 (up from $23,625 in 2025)
New: Extra Standard Deduction for Seniors Over 65
Taxpayers age 65 and older can claim an additional standard deduction on top of the base amount:
- Single filers 65+: $2,050 extra
- Married filing jointly 65+: $1,650 extra per qualifying spouse
Earned Income Tax Credit (EITC) — Higher Maximums
The maximum EITC for 2026 rose to $8,231 for families with three or more qualifying children, up from $8,046 in 2025. Other maximum amounts: $7,316 (two children), $4,427 (one child), and $664 (no children). This credit is one of the most powerful tax benefits for working families — and many eligible taxpayers miss it by not checking their eligibility each year.
Retirement Account Contribution Limits for 2026
If you're saving for retirement, the contribution limits got a meaningful boost:
- 401(k), 403(b), and 457 plans: $24,500 (up from $23,500 in 2025)
- Traditional and Roth IRA: $7,500
- IRA catch-up contribution (age 50+): $1,100
- HSA (individual): $4,400
- HSA (family): $8,750
- FSA: $3,400 (with $680 carryover maximum)
Contributing the maximum to a 401(k) reduces your taxable income by $24,500 — at the 22% bracket, that's a direct tax savings of $5,390.
Estate and Gift Tax Changes
The federal estate tax exemption jumped to $15 million per person for 2026 (up from $13.99 million in 2025), or $30 million for married couples. The annual gift tax exclusion remains at $19,000 per recipient.
Alternative Minimum Tax (AMT)
The AMT exemption for 2026 is $90,100 for single filers and $140,200 for married couples filing jointly. Phase-outs begin at $500,000 for single filers and $1,000,000 for married couples. These higher exemptions reduce AMT exposure for most taxpayers who were previously caught by it.
Child Tax Credit
The maximum Child Tax Credit for 2026 is $2,200 per qualifying child, with a refundable portion of up to $1,700.
What You Should Do Now
These changes take effect for the 2026 tax year — meaning they apply to income earned between January 1 and December 31, 2026, reported on returns filed in early 2027. There are still practical steps to take now:
- Review your W-4 withholding if you had a major life change in 2025 or 2026 (new job, marriage, child, large bonus). Updated bracket thresholds and new OBBBA deductions mean your withholding from last year may no longer match what you'll owe.
- Max out retirement contributions. Higher 401(k) and IRA limits give you more room to reduce taxable income. At the 22% bracket, the full $24,500 401(k) contribution saves $5,390 in federal taxes.
- Compare standard deduction vs. itemizing. With the SALT deduction cap raised to $40,000 for 2026, more taxpayers in high-tax states may find itemizing worthwhile for the first time since 2018. Run the math before assuming the standard deduction still wins.
- Check your EITC eligibility. Income thresholds for the credit shift each year, so even if you didn't qualify last year, you might in 2026. The maximum of $8,231 for families with three or more children is the highest it's ever been.
- Claim new Schedule 1-A deductions if you qualify. Workers who received tips, overtime pay, or car loan interest on a new vehicle purchased after December 31, 2024 should ensure their tax software or preparer is applying the new deductions.
How the 2026 Bracket Changes Affect Real Taxpayers
| Filing Status / Income | 2025 Estimated Tax | 2026 Estimated Tax | Change |
|---|---|---|---|
| Single / $50,000 | ~$5,374 | ~$4,927 | −$447 |
| Single / $100,000 | ~$14,843 | ~$13,962 | −$881 |
| Married / $100,000 | ~$8,347 | ~$6,654 | −$1,693 |
| Married / $150,000 | ~$17,847 | ~$15,254 | −$2,593 |
The reductions above reflect both the higher bracket thresholds and the larger standard deduction — not OBBBA-specific deductions, which would further reduce tax for eligible workers. Use our Federal Income Tax Calculator to estimate your specific 2026 tax bill based on the updated brackets and your personal situation.
How to Read Your Bracket Position
The bracket rates are marginal -- meaning only the income within each bracket range is taxed at that bracket's rate. A single filer earning $60,000 in taxable income is in the 22% bracket, but pays 10% on the first $11,925, 12% on the next $36,550, and 22% only on the remaining $11,525. The effective federal tax rate on that $60,000 is approximately 14.3% -- meaningfully lower than the stated 22% marginal rate.
Your effective rate is what you actually pay on all income; your marginal rate is what you pay on the next dollar earned. Tax planning strategies that reduce your taxable income -- 401(k) contributions, HSA contributions, above-the-line deductions -- reduce your tax at the marginal rate, making them especially valuable when your marginal rate is high. See our marginal vs. effective tax rate guide for a full comparison of the two measures.
Impact of the OBBBA on the 2026 Tax Year
Beyond the standard inflation adjustments, 2026 is the first full tax year under the One Big Beautiful Bill Act, which introduced several new deductions on Schedule 1-A: tips (up to $25,000), overtime pay (up to $12,500), car loan interest on new vehicles (up to $10,000), and a senior deduction for taxpayers 65 and older ($6,000). Workers eligible for any of these deductions will see their effective 2026 tax rate reduced beyond what the bracket adjustments alone would produce. Use our federal income tax calculator to model your 2026 tax with any applicable Schedule 1-A deductions included.