IRS updates 2026 tax brackets and standard deduction for 2027 filings

The Internal Revenue Service on Thursday released its annual inflation adjustments and legislative changes that will alter tax brackets, the standard deduction, and several credits and limits for the 2026 tax year, with the adjustments taking effect for returns filed in 2027. The agency said the updates, including provisions required by the One Big Beautiful Bill Act, raise the amount taxpayers can exclude from income and push the income thresholds for each marginal tax rate higher while leaving the statutory tax rates unchanged.

Under the IRS announcement, the standard deduction for 2026 will increase to 16,100 for single filers and married individuals filing separately, 24,150 for heads of household, and 32,200 for married couples filing jointly. The One Big Beautiful Bill Act also raised the standard deduction for the 2025 tax year to 15,750 for single filers and 31,500 for joint filers as a transitional adjustment.

Tax rates remain at 10, 12, 22, 24, 32, 35, and 37 percent, but the income thresholds that determine those rates will be higher to reflect inflation. For single filers the bracket thresholds will range from 10 percent on income up to 12,400, through 37 percent on...