IRS Reveals 2026 Tax Brackets: Big Savings for Some, Less for Others
The Internal Revenue Service (IRS) has released updates to the tax brackets for the year 2026. This change comes even amid a government shutdown affecting IRS operations. Each year, the IRS adjusts taxable income thresholds to reflect inflation, based on the Consumer Price Index (CPI). These updates aim to alleviate the tax burden on individuals whose wages may have risen just to keep pace with inflation.
2026 Tax Bracket Updates
The updated tax brackets for individual filers and married couples filing jointly show modest increases compared to previous years. Bloomberg Tax estimates a 2.7% rise in tax brackets for 2026, a notable reduction from the 7% and 5.4% increases seen in 2023 and 2024, respectively.
New Individual Tax Brackets
- 10% tax bracket: $0 — $12,400
- 12% tax bracket: $12,401 — $50,400
- 22% tax bracket: $50,401 — $105,700
- 24% tax bracket: $105,701 — $201,775
- 32% tax bracket: $201,776 — $256,225
- 35% tax bracket: $256,226 — $640,600
- 37% tax bracket: $640,601 and above
The upper limit of the lowest tax bracket increased from $11,925 in 2025 to $12,400, reflecting a 3.9% rise. The threshold for the top marginal rate (37%) increased from $626,351 to $640,601, a 2.3% adjustment.
New Tax Brackets for Married Couples
- 10% tax bracket: $0 — $24,800 (up from $23,850 in 2025)
- 12% tax bracket: $24,801 — $100,800
- 22% tax bracket: $100,801 — $211,100
- 24% tax bracket: $211,401 — $403,550
- 32% tax bracket: $403,551 — $512,450
- 35% tax bracket: $512,451 — $768,700
- 37% tax bracket: $768,701 and above (up from $751,601)
Increased Deductions and Credits
Along with the updates to tax brackets, the IRS is increasing various deductions for the 2026 tax year:
- $16,100 for individuals and married personnel filing separately
- $24,150 for heads of household
- $32,200 for married couples filing jointly
The earned income tax credit for families with three or more children will rise from $8,046 to $8,231. Moreover, a new seniors’ tax deduction of $6,000 has been introduced.
Impact on Taxpayers
These adjustments can positively affect taxpayers’ liabilities. While the increase in tax brackets is modest, higher thresholds and greater deductions may provide more flexibility in managing taxes. This is particularly beneficial for those experiencing income growth or higher local inflation rates. However, individual circumstances will ultimately dictate the financial impact of these changes.
For detailed guidance and personalized advice, taxpayers should consult a financial professional. The IRS updates represent a significant step toward ensuring that tax brackets reflect current economic conditions while aiding taxpayers in navigating their financial obligations effectively.
