Now that the revised federal tax brackets are in, many American taxpayers could see their income tax bills drop slightly in 2026, even if their income increases. The Internal Revenue Service (IRS) has updated the tax thresholds and standard deductions to account for inflation, a routine adjustment that helps prevent taxpayers from being pushed into higher tax brackets due to rising wages alone.
While the tax rates themselves remain unchanged, ranging from 10% to 37%, the income thresholds have been increased by approximately 2.7% across the board. Additionally, the standard deduction has been raised by 7.3%, offering broader relief to taxpayers who do not itemize their deductions.
New Standard Deduction Amounts for 2026
- $32,200 for married couples filing jointly
- $16,100 for single filers and married individuals filing separately
- $24,150 for heads of household
These changes are expected to reduce the taxable income for most households, especially those in the middle-income brackets.
Updated Federal Income Tax Brackets
For single filers:
- 10% on income up to $12,400
- 12% on $12,401 – $47,150
- 22% on $47,151 – $100,525
- 24% on $100,526 – $191,950
- 32% on $191,951 – $243,725
- 35% on $243,726 – $609,350
- 37% on income over $609,350
For married couples filing jointly:
- 10% on income up to $24,800
- 12% on $24,801 – $94,300
- 22% on $94,301 – $201,050
- 24% on $201,051 – $383,900
- 32% on $383,901 – $487,450
- 35% on $487,451 – $731,200
- 37% on income over $731,200
According to calculations based on the new brackets, a single filer earning $100,000 will owe around $13,170 in federal income taxes in 2026, approximately $279 less than in 2025.
Additional Adjustments
The IRS has also raised several other tax-related thresholds:
- The Alternative Minimum Tax (AMT) exemption for single filers will rise to $90,100, with the phase-out beginning at $500,000
- The estate and gift tax exclusion increases to $15 million, up from $13.99 million
In total, more than 60 tax provisions have been adjusted for inflation, including thresholds for tax credits, flexible spending accounts, and education-related deductions.
Avoiding 'Bracket Creep'
These annual adjustments are designed to avoid what's known as "bracket creep,'' when inflation causes taxpayers to be pushed into higher tax brackets even though their purchasing power has not changed. By indexing tax brackets and deductions to inflation, the IRS helps preserve real after-tax income for workers and families.
Financial experts recommend that taxpayers review the updated brackets as part of their year-end planning. With modest changes in income, some may find themselves paying less in taxes, or avoiding a higher bracket altogether.
