The Internal Revenue Service on Thursday released inflation adjustments for dozens of tax provisions for 2026, alongside changes required by the One Big Beautiful Bill Act, lifting the standard deduction and shifting income thresholds that determine tax bills.
According to the IRS’s notification, the standard deduction will rise to $16,100 for single filers and $32,200 for married couples filing jointly in tax year 2026, with heads of household at $24,150. Under the OBBBA, the 2025 standard deduction is $15,750 for single filers and $31,500 for joint filers, providing a one-year bridge before 2026 indexing takes effect.
Here are some of the other key changes worth noting:
- The top 37% rate remains, applying above $640,600 (single) and $768,700 (joint) in 2026, with other brackets adjusted upward to reflect inflation and limit "bracket creep."
- The federal estate-tax exclusion increases to $15 million for deaths in 2026, up from $13.99 million in 2025, according to the IRS adjustments.
- For 2026, the Alternative Minimum Tax (AMT) exemption is $90,100 for individuals (phaseout begins $500,000) and $140,200 for married joint filers (phaseout begins $1 million).
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- The adoption credit rises to $17,670 (with $5,120 refundable). The health FSA salary-reduction cap moves to $3,400 with a $680 carryover and the monthly transit fringe benefit increases to $340.
- For 2026, the Earned Income Tax Credit (EITC) maximum for families with three or more children rises to $8,231, up from 2025 levels, per the indexing announcement.
- Self-only MSAs (Medicare Set Aside) must carry deductibles of $2,900–$4,400 and an out-of-pocket cap of $5,850. Family coverage deductibles are $5,850–$8,750 with a $10,700 out-of-pocket limit.
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TL,DR: The OBBBA provisions essentially pair the IRS's annual indexing with statutory tweaks, including higher standard deductions and other adjustments cited in agency guidance.
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