IRS Announces New Federal Income Tax Brackets and Deductions for 2026

The Internal Revenue Service (IRS) has updated the federal income tax rates and income brackets for the 2026 tax year, which will affect tax returns filed in 2027.

These changes are designed to adjust for inflation and help maintain the purchasing power of taxpayers, although some people might see higher taxes if their incomes rise.
 

Higher Income Thresholds for Tax Brackets

For 2026, the IRS has changed the income levels that apply to each tax bracket. This means that the amount of tax you pay on each portion of your income could be different from previous years.

The top tax rate of 37% will apply to income over $640,600 for single people, and over $768,700 for married couples filing jointly.
 

Increase in Standard Deduction

The standard deduction—the amount most taxpayers can subtract from their income before taxes are calculated—is also increasing:
 

• Married couples filing jointly: The standard deduction will be $32,200 (up from $31,500 in 2025).
• Single filers: The standard deduction will be $16,100 (up from $15,750 in 2025).

This increase helps reduce the income that is taxed, especially for people who do not itemize deductions on their tax return.
 

2026 Federal Income Tax Brackets

Here are the new tax brackets for 2026:

For Single Filers:
 

• 10%: $0 to $12,400
• 12%: $12,401 to $50,400
• 22%: $50,401 to $105,700
• 24%: $105,701 to $201,775
• 32%: $201,776 to $256,225
• 35%: $256,226 to $640,600
• 37%: Over $640,601

For Married Couples Filing Jointly:
 

• 10%: $0 to $24,800
• 12%: $24,801 to $100,800
• 22%: $100,801 to $211,400
• 24%: $211,401 to $403,550
• 32%: $403,551 to $512,450
• 35%: $512,451 to $768,700
• 37%: Over $768,701

 

Other Tax Changes

The IRS is also making adjustments to other tax rules for 2026, such as limits on long-term capital gains, estate and gift taxes, and eligibility requirements for credits like the Earned Income Tax Credit (EITC).

These updates may impact many taxpayers, including investors, people inheriting assets, and families with low incomes.

For instance, those selling investments or property, or planning large gifts or inheritances, should review the new thresholds to avoid unexpected taxes.

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