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 expected to be approximately 2.2% higher than the retroactively increased standard deduction for 2025, which was raised from $750 to $1,500 [6] - The standard deduction amounts for 2026 are: - $16,100 for single or married filing separately - $32,200 for married filing jointly - $24,150 for heads of households [7] Impact on Taxpayers - The average middle-income household's taxes in 2026 are projected to decrease by about $1,800, while the lowest-income households may see a reduction of around $150 [7] - Taxpayers may benefit from adjusting their withholding amounts to keep more of their paycheck throughout the year, rather than waiting for refunds [8][11]