IRS Updates 2026 Tax Brackets and Standard Deductions: What U.S. Taxpayers Need to Know

The Internal Revenue Service (IRS) has released the 2026 federal income tax brackets and standard deduction amounts through Revenue Procedure 2025-32. These updates reflect annual inflation adjustments and incorporate changes from the One Big Beautiful Bill (OBBB) tax law.

The new figures apply to income earned in tax year 2026 and will influence how individuals, families, and businesses plan their taxes nationwide. Here’s a breakdown of the new numbers and why they matter.

2026 Federal Income Tax Brackets

The seven federal tax rates remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. However, the income thresholds for each bracket have been adjusted upward to reflect inflation.

Filing Status	37% Bracket Begins At	35% Bracket Begins At	24% Bracket Begins At
Single	$619,300	$243,700	$102,300
Married Filing Jointly	$1,238,600	$487,400	$204,600
Head of Household	$832,700	$406,100	$163,300

The upward adjustments mean that more income will be taxed at lower rates, offering a small benefit to taxpayers as wages and prices rise.

2026 Standard Deduction Increases

The IRS also raised the standard deduction, which reduces taxable income for millions of Americans.

• Married filing jointly: $32,200 (up from $29,200 in 2025)

• Single and married filing separately: $16,100 (up from $14,600)

• Head of household: $23,800 (up from $21,900)

For most taxpayers, this change means a lower overall tax bill and less need to itemize deductions, as well as opportunities for wealth transfer before potential rollbacks after 2026.

Other Key 2026 IRS Adjustments

Several other inflation-indexed items were updated:

• Alternative Minimum Tax (AMT) exemption: $89,500 for individuals, $179,000 for joint filers

• Estate and gift tax exemption: $15 million per person, up from $14.2 million

• Annual gift tax exclusion: $20,000, up from $18,000

• Foreign earned income exclusion: $138,500

• Earned Income Tax Credit (EITC): Maximum value increased to $8,050 for qualifying families

These adjustments have wide-ranging effects on estate planning, charitable giving, and international assignments.

Why These Changes Matter

For tax professionals and business owners, understanding these new thresholds is critical for planning and compliance:

• Payroll and withholding: Employers will need to update systems for 2026 pay periods.

• Year-end planning: CPAs should begin modeling 2026 liability using the new brackets to guide bonus timing, capital gains recognition, and retirement distributions.

• Estate and gifting strategy: The higher exemption provides short-term opportunities for wealth transfer before potential future rollbacks.

  
  

State Impact and GEO Relevance

While these updates apply at the federal level, state tax systems often align their brackets or deductions with IRS figures. States such as California, New York, and Illinois are expected to release corresponding 2026 inflation updates within the next few months.

Taxpayers in states that conform to federal law should monitor their local revenue department announcements closely to ensure consistent planning between federal and state obligations.

What’s Next

The IRS will publish updated withholding tables and employer worksheets in early 2026. Tax practitioners should integrate these figures into payroll systems, client tax estimates, and planning software ahead of the filing season.

If you're a tax professional, start using the 2026 brackets in your Q4 2025 advisory meetings to identify savings opportunities and adjust withholding early.

Stay Ahead of Tax Changes with Bizora

Bizora AI delivers real-time federal and state tax updates designed for CPAs, tax attorneys, and financial advisors. Stay informed, stay compliant, and stay ahead of your clients’ needs.

Try Bizora today for real-time, expert-curated tax updates that keep you ahead of IRS and Treasury developments.