💼 IRS Announces 2026 Tax Adjustments: What You Need to Know
THE PRESS CENTER/ BREAKING NEWS/ IRS
October 9, 2025 — Washington, D.C.
The IRS has officially released its 2026 tax year inflation adjustments, impacting over 60 tax provisions. These changes, outlined in Revenue Procedure 2025-32, include updates to tax brackets, deductions, credits, and more — many of which stem from the recently enacted One, Big, Beautiful Bill (OBBB).
Whether you’re a taxpayer, business owner, or financial professional, here’s a breakdown of the most important updates you’ll want to keep in mind as you prepare for the upcoming tax season.
📊 Standard Deduction Gets a Boost
The standard deduction — the amount taxpayers can subtract from income before taxes — is increasing again:
| Filing Status | 2025 Deduction | 2026 Deduction |
|---|---|---|
| Single / Married Filing Separately | $15,750 | $16,100 |
| Married Filing Jointly / Surviving Spouse | $31,500 | $32,200 |
| Head of Household | $23,625 | $24,150 |
💰 Updated Tax Brackets for 2026
The top marginal tax rate remains at 37%, but income thresholds have shifted:
- 37%: Over $640,600 (single) / $768,700 (married filing jointly)
- 35%: Over $256,225 / $512,450
- 32%: Over $201,775 / $403,550
- 24%: Over $105,700 / $211,400
- 22%: Over $50,400 / $100,800
- 12%: Over $12,400 / $24,800
- 10%: Up to $12,400 / $24,800
🧾 Other Key Adjustments
✅ Alternative Minimum Tax (AMT)
- Exemption: $90,100 (single), $140,200 (married filing jointly)
- Phase-out thresholds: $500,000 (single), $1,000,000 (joint)
🏡 Estate Tax
- Exclusion amount: $15 million (up from $13.99 million in 2025)
👶 Adoption Credit
- Max credit: $17,670
- Refundable portion: $5,120
👨👩👧 Employer-Provided Childcare Credit
- Max credit: $500,000 ($600,000 for eligible small businesses)
💡 Indexed Benefits & Credits
- Earned Income Tax Credit (EITC):
- Max credit: $8,231 (for 3+ qualifying children)
- Transportation Fringe Benefit:
- Monthly limit: $340
- Health FSAs:
- Contribution limit: $3,400
- Carryover limit: $680
- Medical Savings Accounts (MSAs):
- Self-only coverage: Deductible $2,900–$4,400; Out-of-pocket max $5,850
- Family coverage: Deductible $5,850–$8,750; Out-of-pocket max $10,700
- Foreign Earned Income Exclusion:
- $132,900
- Annual Gift Exclusion:
- $19,000 (unchanged)
- Gifts to non-citizen spouses: $194,000
🚫 Items That Stay the Same
Some provisions remain unchanged due to legislative decisions:
- Personal Exemptions: Still $0 (eliminated under TCJA, made permanent by OBBB)
- Itemized Deduction Limits: Permanently removed for most taxpayers, though high-income earners may face limitations
- Lifetime Learning Credit:
- Phase-out range: $80,000–$90,000 (single) / $160,000–$180,000 (joint)
📝 Final Thoughts
These updates will affect how much you owe — or get back — when filing your 2026 tax return in 2027. Whether you’re planning your finances, adjusting payroll, or preparing for year-end tax strategies, now’s the time to take note.
For full details, visit the IRS newsroom.
