The Internal Revenue Service (IRS) announced the 2026 tax year inflation adjustments, updating tax brackets, deductions, and other provisions of the U.S. tax code.
For returns filed in 2027, most Americans will see slightly higher income thresholds before entering higher tax brackets. The adjustments reflect inflation and the provisions of the One Big Beautiful Bill Act, which made permanent several tax cuts that were set to expire at the end of 2025.
“The 2026 adjustments prevent what would have been a tax increase for more than 60% of American taxpayers,” according to the Tax Foundation.
2026 Standard Deduction Increases
| Filing Status | 2025 Standard Deduction | 2026 Standard Deduction | Change |
|---|---|---|---|
| Single | $15,750 | $16,100 | +$350 |
| Married Filing Jointly | $31,500 | $32,200 | +$700 |
| Head of Household | $22,500 (est.) | $22,950 (est.) | +$450 |
The additional standard deduction for taxpayers aged 65 and older will also rise to:
- $2,050 for single filers, and
- $1,650 per spouse for married couples.
Under the One Big Beautiful Bill Act, qualifying low- and middle-income seniors will continue receiving an extra senior deduction through 2028.
2026 Federal Income Tax Brackets
The top marginal tax rate remains 37%, applying to:
- Single taxpayers earning over $640,600
- Married couples filing jointly earning over $768,700
Below are the full inflation-adjusted brackets for 2026:
| Tax Rate | Single Filers (Income Over) | Married Filing Jointly (Income Over) |
|---|---|---|
| 37% | $640,600 | $768,700 |
| 35% | $256,225 | $512,450 |
| 32% | $201,775 | $403,550 |
| 24% | $105,700 | $211,400 |
| 22% | $50,400 | $100,800 |
| 12% | $12,400 | $24,800 |
| 10% | Up to $12,400 | Up to $24,800 |
“The One Big Beautiful Bill Act ensured that 2026 tax rates remain consistent with 2025, avoiding an automatic rate reset,” notes IRS policy analyst Tanya Morales.
Alternative Minimum Tax (AMT) for 2026
The AMT exemption amount will increase slightly due to inflation indexing:
| Filing Status | AMT Exemption 2026 | Phaseout Begins |
|---|---|---|
| Single | $90,100 | $500,000 |
| Married Filing Jointly | $140,200 | $1,000,000 |
This ensures fewer middle-income households are subject to the AMT, which primarily affects higher earners with significant deductions or alternative income sources.
Estate and Gift Tax Adjustments
For individuals who pass away in 2026, the estate tax exclusion increases to:
- $15 million (up from $13.99 million in 2025).
The annual gift tax exclusion remains at $19,000 per recipient, allowing taxpayers to give gifts without incurring federal gift tax.
| Tax Type | 2025 | 2026 | Change |
|---|---|---|---|
| Estate Tax Exclusion | $13.99 million | $15 million | +$1.01 million |
| Gift Tax Exclusion | $19,000 | $19,000 | No change |
Flexible Spending Account (FSA) and Other Adjustments
The maximum contribution for healthcare Flexible Spending Accounts (FSAs) will increase by $100, allowing individuals to set aside more pre-tax money for medical expenses.
| Provision | 2025 Limit | 2026 Limit |
|---|---|---|
| FSA Contribution | $3,300 | $3,400 |
Additional inflation-linked thresholds — including Earned Income Tax Credit (EITC) and 401(k) contribution limits — are expected to be released by the IRS in early 2026.
Impact of the “One Big Beautiful Bill Act”
The Republican tax and spending package, passed earlier in 2025, retroactively lifted the 2025 tax thresholds and made permanent several provisions from the Tax Cuts and Jobs Act (TCJA).
Key effects:
- Prevented a scheduled 2026 tax increase for most middle-income taxpayers.
- Locked in the 37% top marginal rate instead of reverting to 39.6%.
- Extended expanded standard deductions and child tax credits beyond 2025.
“This law stabilized tax rates for the next decade and provides predictability for families and small businesses,” said Mark Shapiro, senior economist at the Tax Foundation.
What Taxpayers Should Expect for 2026
- Higher deductions: More income shielded from taxation.
- Unchanged marginal rates: Avoids a tax hike for most households.
- Larger AMT exemption: Fewer upper-middle earners impacted.
- Stable estate rules: High exemption threshold benefits wealth transfer planning.
- FSA increase: Modest improvement in pre-tax savings options.
Taxpayers can use the Tax Foundation’s 2026 calculator to estimate how these adjustments will affect their specific situation.
FAQs About IRS 2026 Tax Bracket Adjustments
What is the 2026 standard deduction?
$16,100 for single filers and $32,200 for married couples filing jointly.
What is the top federal tax rate for 2026?
37%, applying to incomes over $640,600 (single) or $768,700 (married).
Are tax brackets changing in 2026?
Yes, slightly due to inflation indexing, but the rates remain the same under the One Big Beautiful Bill Act.
What is the new estate tax exemption?
$15 million per individual, effective for deaths in 2026.
What is the new FSA contribution limit?
$3,400 per individual, up from $3,300 in 2025.
Conclusion
The IRS 2026 tax adjustments bring modest increases across deductions and thresholds, offering relief from inflation without changing federal tax rates.
The standard deduction increase, expanded AMT exemption, and stable 37% top rate reflect the government’s continued efforts to provide predictability for taxpayers while adjusting for inflation.
Taxpayers are encouraged to review their withholdings and consult tax professionals early in 2026 to plan for optimal savings under the new structure.
“The 2026 brackets represent steady tax policy amid inflation — more relief, same rates,” summarized the IRS announcement.
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