Key Takeaways
- Inflation adjustments for 2026 are modest at 2.7%, resulting in slightly higher tax bracket thresholds and standard deductions
- The One Big Beautiful Bill (OBBBA) makes many TCJA provisions permanent while lowering AMT phase-out thresholds, potentially impacting more high-income taxpayers in 2026
- Expanded estate tax exemptions, a new no-tax rule on tips and overtime, and an added senior deduction offer new opportunities for tax savings
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The IRS has released tax bracket information for 2026. After a 5.4% percent impact in 2024, inflation has not been as impactful, dropping to 2.8% in 2025 and falling slightly lower to 2.7% in 2026.
Our tax specialists have reviewed the tax bracket thresholds for 2026 compared to 2025 and discussed some of the major changes made with the passage of the One Big Beautiful Bill (OBBB).
Impact of “One Big Beautiful Bill” on individual income tax and Alternative Minimum Tax
OBBB made permanent many expiring Tax Cuts and Jobs Act (TCJA) provisions, including the individual income tax structure and higher estate and gift tax thresholds. The new law Trump's tax plan also permanently extends the TCJA’s higher Alternative Minimum Tax (AMT) exemption amounts, which continue to be adjusted annually for inflation.
Starting in 2026, the OBBB will maintain these AMT exemptions but lower the income levels at which they begin to phase out to $500,000 for single filers and $1 million for joint filers. OBBB will also double the exemption phase-out percentage (increasing from 25% to 50%). As a result, more high-income taxpayers could be subject to the AMT in 2026 and beyond, even if they weren’t before.
Comparison of 2026 tax brackets to 2025 tax brackets
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Individual Income Tax brackets (Married filing jointly)
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2026
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2025
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10%
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$0 to $24,800
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$0 to $23,850
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12%
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$24,801 to $100,800
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$23,851 to $96,950
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22%
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$100,801 to $211,100
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$96,951 to $206,700
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24%
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$211,111 to $403,550
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$206,701 to $394,600
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32%
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$403,551 to $512,450
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$394,601 to $501,050
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35%
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$512,451 to $768,700
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$501,051 to $751,600
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37%
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$786,701 and above
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$751,601 and above
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Individual Income Tax brackets (Single filers)
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2026
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2025
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10%
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$0 to $12,400
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$0 to $11,925
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12%
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$12,401 to $50,400
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$11,926 to $48,475
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22%
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$50,401 to $105,700
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$48,476 to $103,350
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24%
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$105,701 to $201,775
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$103,351 to $197,300
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32%
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$201,776 to $256,225
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$197,301 to $250,525
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35%
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$256,226 to $640,600
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$250,526 to $623,350
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37%
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$640,601 and above
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$623,351 and above
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Standard Deduction
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Filing status
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2026
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2025
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Married Filing Jointly/Surviving Spouses
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$32,200
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$31,500
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Heads of Household
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$24,150
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$23,625
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All Other Taxpayers
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$16,100
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$15,750
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Alternative Minimum Tax
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Filing status
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2026
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2025
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Married Filing Jointly/Surviving Spouses
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$140,200
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$137,000
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Unmarried Individuals
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$90,100
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$88,100
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Increased estate tax credits, no tax on tips, senior tax deduction
OBBB provided a clearer picture of the tax planning future, including permanently raising the estate tax threshold, adding a provision for no tax on tips for tipped workers (with a $25,000 limit), no tax on overtime, and a $6,000 deduction for Americans aged 65 and older.
The annual exclusion for gifts will remain at $19,000 for 2026, allowing for larger gifts without tax implications. For any decedent who dies in the calendar year, the basic exclusion amount is $15,000,000.