🧾 IRS Announces New 2026 Federal Income Tax Brackets and Deductions — Here’s What Changes

 

🔔 Overview

The Internal Revenue Service (IRS) has officially released the updated federal income tax brackets and standard deductions for 2026, incorporating inflation adjustments and new provisions introduced under the One Big, Beautiful Bill (OBBB).

These changes are designed to prevent taxpayers from paying higher taxes solely because of inflation — commonly known as “bracket creep.”

💰 1. Federal Income Tax Brackets for 2026

For tax year 2026 (filed in 2027), the IRS has raised all seven tax bracket thresholds by about 2.3%.

The top rate (37%) remains unchanged, but applies to higher income levels:

Filing Status 37% Tax Bracket Starts At

Single $640,600
Married Filing Jointly $768,700

The other brackets (35%, 32%, 24%, 22%, 12%, and 10%) have also shifted upward in similar proportions to reflect inflation adjustments.

✅ Good news: If your income rose less than 2.3%, you won’t move into a higher tax bracket just because of inflation.

📊 2. Higher Standard Deductions for 2026

The standard deduction—used by most taxpayers—will increase across all filing statuses:

Filing Status 2026 Deduction Amount

Single / Married Filing Separately $16,100
Married Filing Jointly / Surviving Spouse $32,200
Head of Household $24,150

Additional deductions for seniors (65+) and blind taxpayers remain available:

+$1,650 for singles

+$2,050 for unmarried filers over 65

Under the OBBB Act, a temporary bonus $6,000 deduction is added for qualified senior taxpayers through 2028 — further lowering taxable income.

🏦 3. Other Key IRS Adjustments for 2026

The IRS also revised multiple other tax provisions and credit limits:

Alternative Minimum Tax (AMT) exemption: $90,100 for single filers; $1,000,000 phase-out for married couples.

Estate tax exclusion: Increases to $15 million (from $13.99M).

Adoption credit: Maximum credit of $17,670; up to $5,120 refundable.

Employer childcare tax credit: Boosted from $150,000 to $500,000, or $600,000 for small businesses.

Health FSA limit: Rises from $3,300 to $3,400.

Foreign earned income exclusion: Now $132,900.

Earned Income Tax Credit (EITC): Up to $8,231 for taxpayers with three or more children.

Transportation fringe benefits: Monthly cap set at $340.

Gift exclusion: Unchanged at $19,000 per recipient; $194,000 for non-citizen spouses.

🧮 4. What It Means for You

✅ Middle-income relief: Most taxpayers won’t see higher rates unless income increases significantly.
✅ Larger deductions: The new standard deductions reduce taxable income.
✅ Seniors benefit most: Added deductions and credits can mean substantial tax savings.
✅ Estate planning advantage: The $15M exclusion creates more flexibility for wealthy families.
✅ Employer perks: Expanded childcare credits encourage more family-friendly workplace policies.

💡 Tax Planning Tips for 2026

1. Adjust your withholdings early to match the new brackets.

2. Maximize retirement contributions to lower taxable income.

3. Claim available credits—especially if you qualify for the EITC or adoption credit.

4. Review estate and gift strategies before limits potentially expire in 2028.

5. Consult a tax advisor to take advantage of the new provisions under OBBB.

🔚 Conclusion

The IRS’s 2026 tax bracket update means higher deductions, adjusted thresholds, and more breathing room for many U.S. taxpayers. While the rates stay the same, these inflation-based shifts can translate into real savings when you file your 2027 return.

To stay compliant and maximize benefits, review your income strategy and update tax planning decisions before the new year begins.

📚 Further Reading / Official Resources

For more detailed and up-to-date information on the 2026 federal income tax brackets, deductions, and other tax changes, refer to the official IRS resources below:

• 📝 IRS – 2026 Inflation Adjustments & OBBB Updates
  https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill

• 🧾 IRS – One Big Beautiful Bill Provisions
  https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

• 👵 IRS – Tax Deductions for Working Americans and Seniors (OBBB Act)
  https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors

• 📢 IRS – News Releases for Current Month (IR-2025-103)
  https://www.irs.gov/newsroom/news-releases-for-current-month

• 📊 IRS – Inflation-Adjusted Tax Items by Tax Year
  https://www.irs.gov/newsroom/inflation-adjusted-tax-items-by-tax-year

• 🏦 IRS – Estate and Gift Tax FAQs
  https://www.irs.gov/newsroom/estate-and-gift-tax-faqs