The IRS has released the annual inflation adjustments for tax year 2026, including updated tax brackets, standard deductions, and cost-of-living adjustments.
Important Timing Note: These numbers apply to tax year 2026—the period beginning January 1, 2026. You’ll use these figures to prepare your 2026 tax returns in 2027 and for tax planning throughout 2026. For your 2025 tax returns (filed in 2026), refer to the 2025 tax numbers instead.
Planning Considerations
If your financial situation remains stable in 2026, use these updated numbers to estimate your tax liability. However, if you’re planning significant changes—such as income fluctuations, marriage, starting a business, or having a child—consider adjusting your withholding or estimated tax payments accordingly.
Additional Changes to Note
Beyond these inflation adjustments, the tax code has been modified by the One Big Beautiful Bill Act . Some of these changes are referenced below. When new withholding tables are published for 2026, you may want to update your withholding (note: no withholding changes for 2025).
2026 Tax Brackets and Rates
There are seven federal tax rates for 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These rates, originally lowered under the Tax Cuts and Jobs Act (TCJA), were made permanent by the One Big Beautiful Bill Act (OBBBA).
Single Taxpayers
| If Taxable Income Is: | The Tax Due Is: |
|---|---|
| $0 – $12,400 | 10% of taxable income |
| $12,401 – $50,400 | $1,240 + 12% of the amount over $12,400 |
| $50,401 – $105,700 | $5,800 + 22% of the amount over $50,400 |
| $105,701 – $201,775 | $17,966 + 24% of the amount over $105,700 |
| $201,776 – $256,225 | $41,024 + 32% of the amount over $201,775 |
| $256,226 – $640,600 | $58,448 + 35% of the amount over $256,225 |
| $640,601 and over | $192,979.25 + 37% of the amount over $640,600 |
Married Taxpayers Filing Jointly
| If Taxable Income Is: | The Tax Due Is: |
|---|---|
| $0 – $24,800 | 10% of taxable income |
| $24,801 – $100,800 | $2,480 + 12% of the amount over $24,800 |
| $100,801 – $211,400 | $11,600 + 22% of the amount over $100,800 |
| $211,401 – $403,550 | $35,932 + 24% of the amount over $211,400 |
| $403,551 – $512,450 | $82,048 + 32% of the amount over $403,550 |
| $512,451 – $768,700 | $116,896 + 35% of the amount over $512,450 |
| $768,701 and over | $206,583.50 + 37% of the amount over $768,700 |
Heads of Household
| If Taxable Income Is: | The Tax Due Is: |
|---|---|
| $0 – $17,700 | 10% of taxable income |
| $17,701 – $67,450 | $1,770 + 12% of the amount over $17,700 |
| $67,451 – $105,700 | $7,740 + 22% of the amount over $67,450 |
| $105,701 – $201,750 | $16,155 + 24% of the amount over $105,700 |
| $201,751 – $256,200 | $39,207 + 32% of the amount over $201,750 |
| $256,201 – $640,600 | $56,631 + 35% of the amount over $256,200 |
| $640,601 and over | $191,171 + 37% of the amount over $640,600 |
Married Taxpayers Filing Separately
| If Taxable Income Is: | The Tax Is: |
|---|---|
| $0 – $12,400 | 10% of taxable income |
| $12,401 – $50,400 | $1,240 + 12% of the amount over $12,400 |
| $50,401 – $105,700 | $5,800 + 22% of the amount over $50,400 |
| $105,701 – $201,775 | $17,996 + 24% of the amount over $105,700 |
| $201,776 – $256,225 | $41,024 + 32% of the amount over $201,775 |
| $256,226 – $384,350 | $58,448 + 35% of the amount over $256,225 |
| $384,351 and over | $103,291.75 + 37% of the amount over $384,350 |
Trusts And Estates
| If Taxable Income Is: | The Tax Due Is: |
|---|---|
| $0 – $3,300 | 10% of taxable income |
| $3,301 – $11,700 | $330 + 24% of the amount over $3,300 |
| $11,701 – $16,000 | $2,346 + 35% of the amount over $11,700 |
| $16,001 and over | $3,851 + 37% of the amount over $16,000 |
Marginal Tax Rates for 2026
Your marginal tax rate is the percentage you pay on your next dollar earned. For 2026, the top rate of 37% applies to single filers earning over $640,600 and joint filers earning over $768,700.
Complete Rate Structure:
- 37%: Over $640,600 (single) / $768,700 (joint)
- 35%: Over $256,225 (single) / $512,450 (joint)
- 32%: Over $201,775 (single) / $403,550 (joint)
- 24%: Over $105,700 (single) / $211,400 (joint)
- 22%: Over $50,400 (single) / $100,800 (joint)
- 12%: Over $12,400 (single) / $24,800 (joint)
- 10%: $12,400 or less (single) / $24,800 or less (joint)
Personal Exemptions Eliminated
Personal exemptions are not available in 2026. Previously, these exemptions reduced taxable income for yourself, your spouse, and dependents. They were eliminated by the 2017 tax reform and remain unavailable under current law.
2026 Standard Deductions
OBBBA increased standard deductions beyond normal inflation adjustments:
Head of Household: $24,150 (+$525)
Single / Married Filing Separately: $16,100 (+$350)
Married Filing Jointly: $32,200 (+$700)
Standard Deduction Amounts
| Filing Status | Standard Deduction Amount |
|---|---|
| Single | $16,100 |
| Married Filing Jointly & Surviving Spouses | $32,200 |
| Married Filing Separately | $16,100 |
| Heads of Household | $24,150 |
Alternative Minimum Tax (AMT) Exemptions
The 2026 AMT exemption amounts reflect inflation adjustments:
Single Filers:
- Exemption: $90,100 (up from $88,100 in 2025)
- Phase-out begins at: $500,000
Married Filing Jointly:
Phase-out begins at: $1,000,000
Exemption: $140,200 (up from $137,000 in 2025)
AMT Exemption Amounts
| Filing Status | Exemption Amount |
|---|---|
| Married Filing Jointly & Surviving Spouses | $140,200 |
| Single | $90,100 |
| Married Filing Separately | $70,100 |
| Trusts and Estates | $31,400 |
Capital Gains Rates
While capital gains tax rates will remain the same in 2026, the income brackets that determine those rates will shift. Most taxpayers will continue to pay a maximum rate of 15%, while a 20% rate will apply to those with taxable income exceeding the thresholds for the 37% ordinary income bracket.
Certain assets—such as art, collectibles, and Section 1250 property (related to depreciation)—are subject to special rules. The updated 0% and 15% capital gains thresholds for 2026 are outlined below:
| Filing Status | Maximum Zero Rate Amount: | Maximum 15% Rate Amount: |
| Single Taxpayers | $49,450 | $545,500 |
| Married Filing Jointly & Surviving Spouses | $98,900 | $613,700 |
| Married Filing Separately | $49,450 | $306,850 |
| Heads of Household | $66,200 | $579,600 |
| Trusts and Estates | $3,300 | $16,250 |
Section 199A (Qualified Business Income) Deduction
Under the 2017 tax reform law, sole proprietors and owners of pass-through businesses (such as LLCs, S corporations, and partnerships) may be eligible for a Qualified Business Income (QBI) deduction of up to 20% to lower the tax rate on their qualified business income. Thanks to the OBBBA, this percentage remains the same as in 2025. The deduction is subject to certain threshold and phased-in amounts.
Section 199A Amounts
| Filing Status | Threshold Amount | Phased-In Amount |
| Married Filing Jointly | $403,500 | $553,500 |
| Married Filing Separately | $201,775 | $276,775 |
| All Other Taxpayers | $201,750 | $276,750 |
In 2026, the OBBBA introduces a minimum Section 199A deduction of $400. To be eligible for this deduction, a taxpayer must have a minimum of $1,000 of qualified business income.
Business Reporting Thresholds
The reporting thresholds for certain business forms are increasing in 2026:
- The threshold for Form 1099-MISC (miscellaneous income) and Form 1099-NEC (nonemployee compensation) has been raised to $2,000, up from $600 in 2025.
Fringe Benefits and Transportation
The monthly limits for both the qualified transportation fringe benefit and qualified parking will increase to $340 in 2026, up $15 from the 2025 amount.
Health Savings Accounts (HSA):
- The annual contribution limit for individuals with self-only coverage is $4,400 ($8,750 for a family).
- Individuals age 55 and older can contribute an additional $1,000 “catch-up” amount.
Medical Savings Accounts (MSA):
- Self-Only Coverage: The annual deductible must be between $2,900 (up $50 from 2025) and $4,400 (up $100 from 2025). The maximum out-of-pocket expense is $$5,850 (up $150).
- Family Coverage: The annual deductible must be between $5,850 (up $150) and $8,750 (up $200). The maximum out-of-pocket expense is $10,700 (up $200).
Health Flexible Spending Cafeteria Plans:
- The dollar limit for employee salary reductions to health flexible spending arrangements increases to $3,400 (up $100).
- For plans allowing carryovers, the maximum carryover amount is $680 (up $20).
Finally, the unpopular shared individual responsibility payment is eliminated for the 2026 tax year, continuing its status from 2025.
Federal Estate & Gift Tax
The federal estate tax exclusion for decedents dying in 2026 will increase to $15,000,000 per person (up from $13,990,000 in 2025) or $30,000,000 per married couple (up from $27,980,000 in 2025). This increase is related to changes in the OBBBA.
The federal gift tax exclusion remains $19,000 in 2026, the same as 2025. This means you can gift $19,000 per person to as many people as you want with no federal gift tax consequences in 2026; if you split gifts with your spouse, that total is $38,000. If your spouse is not a U.S. citizen, tax-free gifts are limited to present interest gifts below the annual exclusion amount, which is $194,000 in 2026 (up from $190,000 in 2025).
Itemized Deductions
Some itemized deductions found on Schedule A have also changed under the OBBBA. Here is a look at some of the most common itemized deductions:
- Medical and Dental Expenses. The “floor” for medical and dental expenses is 7.5% in 2026, meaning you can only deduct those expenses that exceed 7.5% of your AGI.
- State and Local Taxes (SALT). As a result of OBBBA, in 2026, deductions for state and local sales, income, and property taxes remain in place and are limited to a combined total of $40,000 (or $20,000 for married taxpayers filing separately).
- Home Mortgage Interest. You may only deduct interest on acquisition indebtedness—your mortgage used to buy, build, or improve your home—up to $750,000, or $375,000 for married taxpayers filing separately. (The TCJA limits were extended under OBBBA.)
- Charitable Donations. Under OBBBA, taxpayers who do not itemize can claim a charitable deduction of up to $1,000 for single filers and $2,000 for those married filing jointly. This deduction does not apply to contributions made to Donor-Advised Funds (DAFs) or private foundations.
- Casualty and Theft Losses. The deduction for personal casualty and theft losses has been repealed except for losses attributable to a federally declared disaster area. OBBBA expanded the definition of loss to include those from state declarations as well.
- Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions, including unreimbursed employee expenses and tax preparation expenses, which exceed 2% of your AGI have been eliminated.
- Gambling limitations. As a result of OBBBA, taxpayers who itemize their deductions in 2026 are limited to 90% of total gambling losses for the year. Gambling loss deductions cannot be greater than gambling winnings reported for the same year.
For high-income taxpayers who itemize their deductions, the Pease limitations, which used to cap or phase out certain deductions, were eliminated by the TCJA and made permanent by OBBBA. However, there is a new limitation on the tax benefit from itemized deductions for those taxpayers in the highest tax bracket (37%), which effectively caps the benefit for those deductions at 35%.
Schedule 1-A Deductions
What about those new tax deductions under OBBBA, including those for tipped and overtime workers? Those deductions, reported on a new Schedule 1-A, are largely referred to on the schedule by their popular monikers: No Tax on Tips, No Tax on Overtime, No Tax on Car Loan Interest and the “Enhanced Deduction for Seniors.”
Under OBBBA, seniors are eligible to claim a deduction of $6,000 ($12,000 for joint filers if both taxpayers qualify). This deduction is in addition to the additional standard deduction amount for the aged or the blind (details available elsewhere).
Taxpayers who receive qualified tips—which include voluntary cash or charged tips—in customarily tipped occupations can claim a maximum annual deduction of $25,000 in 2026.
Taxpayers who work qualified overtime can claim a maximum annual deduction of $12,500 (or $25,000 for joint filers) in 2026.
The new deduction for car interest is limited to the amount of interest paid on a qualified vehicle or $10,000, whichever is smaller.
