The Internal Revenue Service has released its annual inflation adjustments for the tax year 2026, reflecting changes under the One Big Beautiful Bill (OBBB). The changes will generally apply to tax returns filed in 2027.
Income Tax Brackets Adjustments
The highest marginal rate of 37% will now apply to income above $384,350 for separate filers, $640,600 for single and head of household filers, and $768,700 for joint/surviving spouse filers. Below are the updated income tax brackets for the tax year 2026 with comparative 2025 data.
| 2026 Tax Rate | Single | Married Filing Separately | Married Filing Jointly / Surviving Spouses | Head of Household |
| 10% | Less than $12,400 | Less than $12,400 | Less than $24,800 | Less than $17,700 |
| 12% | $12,400 – $50,400 | $12,400 – $50,400 | $24,801 – $100,800 | $17,701 – $67,450 |
| 22% | $50,401 – $105,700 | $50,401 – $105,700 | $100,801 – $211,400 | $64,451 – $105,700 |
| 24% | $105,701 – $201,775 | $105,701 – $201,775 | $211,401 – $403,550 | $105,701 – $201,750 |
| 32% | $201,776 – $256,225 | $201,776 – $256,225 | $403,551 – $512,450 | $201,751 – $256,200 |
| 35% | $256,226 – $640,600 | $256,226 – $384,350 | $512,451 – $768,700 | $256,201 – $640,600 |
| 37% | Over $640,600 | Over $384,350 | Over $768,700 | Over $640,600 |
| 2025 Tax Rate | Single | Married Filing Separately | Married Filing Jointly / Surviving Spouses | Head of Household |
| 10% | Less than $11,925 | Less than $11,925 | Less than $23,850 | Less than $17,700 |
| 12% | $11,926 – $48,475 | $11,926 – $48,475 | $23,851 – $96,950 | $17,701 – $64,850 |
| 22% | $48,476 – $103,350 | $48,476 – $103,350 | $96,951 – $206,700 | $64,851 – $103,350 |
| 24% | $103,351 – $197,300 | $103,351 – $197,300 | $206,701 – $394,600 | $103,351 – $197,300 |
| 32% | $197,301 – $250,525 | $197,301 – $250,525 | $394,601 – $501,050 | $197,301 – $250,500 |
| 35% | $250,526 – $626,350 | $250,526 – $375,800 | $501,051 – $751,600 | $250,501 – $626,350 |
| 37% | Over $626,350 | Over $375,800 | Over $751,600 | Over $626,350 |
Higher Standard Deduction
The OBBB retroactively raised the standard deduction for the tax year 2025, and the IRS has also incorporated them for the 2026 inflation adjustments offering lower taxable income and more tax savings for taxpayers.
| Filing Status | 2025 (Pre-OBBA) | 2025 (OBBA Applied) | 2026 |
| Single / Married Filing Separately | $15,000 | $15,750 | $16,100 |
| Married Filing Jointly | $30,000 | $31,500 | $32,200 |
| Head of Household | $22,500 | $23,625 | $24,150 |
Furthermore, the OBBB has granted taxpayers 65 years or older with a senior deduction of $6,000 ($12,000 for joint filers) which can be availed until the tax year 2028. Read our dedicated blog for further details.
Higher Estate Tax Credits/Exclusions
Estates of those deceased in 2026 will have a basic exclusion of $15,000,000, up by a million from $13,990,000 in 2025.
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