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Each year, the IRS nudges dozens of tax numbers so ordinary pay rises aren’t secretly taxed away.
For tax year 2026—the returns you’ll file in early 2027—those adjustments reflect recent law changes and modest inflation, and they will determine where taxpayers land in each bracket and how credits and deductions hold up.
Why the IRS Adjusts Tax Rules
The agency updates more than 60 tax provisions annually to prevent “bracket creep,” a quiet effect of inflation that can push people into higher tax rates or shrink the real value of credits and deductions even when pay hasn’t actually risen in terms of purchasing power.
Before 2018, the IRS used the Consumer Price Index (CPI) to measure inflation for these updates. Since the Tax Cuts and Jobs Act of 2017, though, it has relied on the Chained Consumer Price Index (C-CPI), a different inflation measure that changes how thresholds and amounts move over time.
The federal income tax structure continues to use seven marginal rates. For 2025—that is taxes you will file in April 2026—those rates are 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent. The top marginal rate of 37 percent applies to single filers with taxable income above $626,350 and to married couples filing jointly with taxable income above $751,600.
What’s Changed for 2026
A major legislative shift arrived in July 2025 when Congress passed the One Big Beautiful Bill Act (OBBBA). That law made permanent most individual provisions of President Donald Trump’s 2017 tax overhaul that were set to expire at the end of 2025, and also adjusted other elements that feed into next year’s tax parameters.
Taken together with the inflation measure the IRS uses, the agency says that—on average—the inflation-adjusted tax numbers for 2026 will rise by roughly 2.7 percent. These increases apply to the income thresholds that determine tax rates, as well as to many credits and deductions.
Standard Deduction
For 2026, the standard deduction will rise by $350 (to $16,100) for single filers and $700 (to $32,200) for joint filers compared with 2025.
Taxpayers aged 65 and older can claim an extra standard deduction of $2,050 if single or $1,650 if filing jointly. The OBBBA also introduced a new $6,000 senior deduction per qualifying taxpayer, available whether taxpayers itemize or take the standard deduction. It phases out at six percent for incomes above $75,000 (single) and $150,000 (joint).
The personal exemption remains at $0, a change made under the TCJA and made permanent by the OBBBA.
When Tax Rates Will Change
All of the 2026 inflation updates will apply to tax year 2026—meaning they affect incomes and activity occurring during calendar year 2026 and will be reflected when taxpayers file their returns in early 2027.
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