2026 Tax Brackets: Key Changes and How You Can Prepare for Them

Core Insights - Tax rules are set to change in 2026, impacting take-home pay due to adjustments in tax brackets and deductions [1][2] - The IRS has increased tax brackets by approximately 2.3% for 2026, aimed at keeping pace with inflation [3][9] Tax Brackets - The new tax brackets for 2026 are as follows: - 37% for income of $640,601 or more (single) and $768,701 or more (married filing jointly) - 35% for income between $256,226 and $640,600 (single) and $512,451 to $768,700 (married filing jointly) - 32% for income between $201,776 and $256,225 (single) and $403,551 to $512,450 (married filing jointly) - 24% for income between $105,701 and $201,775 (single) and $211,401 to $403,550 (married filing jointly) - 22% for income between $50,401 and $105,700 (single) and $100,801 to $211,400 (married filing jointly) - 12% for income between $12,400 and $50,400 (single) and $24,801 to $100,800 (married filing jointly) - 10% for income of $12,400 or less (single) and $24,800 or less (married filing jointly) [4] Deductions and Credits - The One Big Beautiful Bill Act (OBBBA) has expanded tax credits and deductions, potentially lowering tax bills for many Americans [5][11] - The standard deduction for 2026 is projected to be $16,100 for single filers, $32,200 for married filing jointly, and $24,150 for heads of households [7] - Tax breaks such as the earned income tax credit and state and local tax deductions are expected to reduce the average middle-income household's taxes by about $1,800 and $150 for the lowest-income households [7] Withholding Adjustments - Taxpayers may consider adjusting their withholding amounts to increase take-home pay in 2026, rather than waiting for refunds [8][11] - The expanded credits and deductions could allow taxpayers to lower their withholding while keeping their final tax bill or refund similar to previous years [11]