The IRS updates the 2026 tax brackets and deductions
The Internal Revenue Service, which remains partially operational during the government shutdown, released new federal tax brackets and general deductions for the 2026 tax year.
As required, the IRS makes adjustments to the amounts of income in each tax bracket and the standard deduction, which is the amount that taxpayers can deduct from their paychecks. The changes apply to many other tax credits and tax-related benefits. The changes announced Thursday by the IRS affect many taxpayers who will file taxes in the spring of 2027.
For tax year 2026, the IRS says the standard itemized deduction is $16,100, a 2.2% increase from the current tax year. For heads of household, the standard deduction is $24,150, and for married couples, it is $32,200.
Here’s another change.
Federal income tax brackets for 2026
Perhaps the most significant change from inflation is in the Federal Income tax brackets. The IRS increases the income ranges associated with each bracket in conjunction with the standard deduction, to help ensure a modest increase in payments due to lower tax rates.
Tax brackets determine how much you will pay in each tier of your annual tax bill. The maximum rate for 2026 remains at 37%. There are still a total of seven tiers, made permanent from President Donald Trump’s recent passage of Older Good Credit.
A married couple files jointly
The top tax bracket is the amount you pay on that particular slice of your income, not all of your income. For example, a single filer who had $60,000 of taxable income in 2026 would have a 22% rate but would only pay 22% on income over $12,401 for $50,400, and so on).
Other IRS rate adjustments
The IRS says that more than 60 tax arrangements are affected by the adjustment of total income. Other notable changes include an increase in the earned income tax credit, or EITC, and the amount taxpayers can contribute to variable spending accounts, known as FSAS.
For the EITC, it increases from $8,046 to $8,231 for taxpayers with three or more qualifying children.
And the limit on spending money contributions increases by $100, to $3,400 in 2026. For plans to supply $680, an increase of $680, an increase of $200.
Complete information on inflation adjustments is available on the IRS website.
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