2026 Federal Tax Updates: What’s Changing Next Year
When the One Big Beautiful Bill (OBBB) Act passed on July 4, it introduced new complexities to the tax code. The IRS recently announced its 2026 federal income tax brackets and standard deduction increases, which will apply to returns filed in 2027.
Each year, the IRS adjusts more than 60 tax provisions for inflation to help prevent “bracket creep.” Here’s what’s changing for 2026.
2026 IRS Inflation Adjustments
Category | 2025 | 2026 |
|---|---|---|
Standard Deduction (Married, Joint) | $31,500 | $32,200 |
Standard Deduction (Single) | $15,750 | $16,100 |
AMT Exemption (Married, Joint) | $135,300 | $140,200 |
AMT Exemption (Single) | $86,600 | $90,100 |
The IRS also made cost-of-living adjustments to:
- Earned Income Tax Credit (EITC)
- Child Tax Credit
- Capital Gains Tax Brackets
- Qualified Business Income (QBI) Deduction
2026 Marginal Tax Rates
For tax year 2026, the top tax rate remains 37% for individual single taxpayers with incomes greater than $640,600 ($768,700 for married couples filing jointly).
The other rates are:
35% for incomes over $256,225 ($512,450 for married couples filing jointly)
32% for incomes over $201,775 ($403,550 for married couples filing jointly)
24% for incomes over $105,700 ($211,400 for married couples filing jointly)
22% for incomes over $50,400 ($100,800 for married couples filing jointly)
12% for incomes over $12,400 ($24,800 for married couples filing jointly)
The lowest rate is 10% for incomes of single individuals with incomes of $12,400 or less ($24,800 for married couples filing jointly).
What It Means for You
These updates are designed to keep pace with inflation, but the OBBB Act’s provisions may create ripple effects for certain taxpayers. Reviewing your 2026 tax strategy early can help you make the most of new deductions and avoid surprises next filing season.
Consider meeting with your tax or financial advisor to discuss how these changes may impact your income, credits, or investment strategies.
Pay your taxes. Get your refund status. Find IRS forms and answers to tax questions. We're here to help you understand and meet your federal tax responsibilities. We can be reached at 215-579-5601.
And, as always, if you have any life changes or updates (i.e., new job, promotion, marriage, new baby, new grandchild, etc.) that may affect your current insurance and investing strategy, please call us at 215-579-5601.
–Stacy Brilliant, Chief Operating Officer
Sources: IRS.gov, CNBC.com, October 9, 2025
This material is for informational purposes only and is not intended to replace personalized tax, legal, or accounting advice.
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