2026 Tax Changes: Brackets, Deductions & Examples
Standard deductions rose across all five filing statuses, OBBB added four additional deductions, and bracket thresholds adjusted for inflation. Here is everything that changed — and what did not.
Bottom line up front: For 2026, the standard deduction rises to $16,100 (single) and $32,200 (married filing jointly) per IRS Rev. Proc. 2025-32. Bracket thresholds are adjusted for inflation. OBBB (P.L. 119-21) adds deductions for overtime pay, tips, and auto-loan interest. Rates themselves are unchanged. Use the estimate your taxes after the 2026 bracket changes to run your own numbers.
What changed for 2026
Tax year 2026 is the year the income was earned; a 2026 return is generally filed in 2027. The table compares tax year 2025 with tax year 2026.
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Standard deduction - single | $15,750 | $16,100 | +$350 |
| Standard deduction - married filing jointly | $31,500 | $32,200 | +$700 |
| 37% bracket starts - single | $626,350 | $640,600 | +$14,250 |
| OBBB additional deductions (overtime, tips, auto loan, senior) | Available | Available | No change |
Three categories of change affect the 2026 tax year. First, the IRS published inflation adjustments in IRS Rev. Proc. 2025-32 (issued October 2025), using the Chained Consumer Price Index (C-CPI-U) methodology mandated by IRC §1(f). The thresholds and standard deduction increase by differing percentages compared with 2025. Second, the One Big Beautiful Bill Act (OBBB, P.L. 119-21) permanently extended the Tax Cuts and Jobs Act rates and added several new additional deductions. Third, certain capital gains thresholds also adjusted upward per Rev. Proc. 2025-32 §4.03.
The headline numbers: the standard deduction for single filers increases by $350 to $16,100; for married filing jointly it rises by $700 to $32,200. Because the standard deduction is what most American households claim — roughly 90% of filers after TCJA — this is the change that directly lowers taxable income for the vast majority of taxpayers (IRS Publication 17, current revision). The inflation-indexed bracket shifts also mean that a given dollar amount of income moves into lower brackets for 2026 than it would have in 2025, producing a modest reduction in real tax liability even with no change in nominal income.
Congress also made the OBBB the first significant structural change to additional deductions since the SALT cap was introduced in 2017. The overtime deduction, the qualified tips deduction, the auto loan interest deduction, and the senior additional deduction are all deductions effective for tax years 2025–2028 (P.L. 119-21).
Standard deduction by filing status
The table below shows the 2025 and 2026 standard deduction for all five filing statuses, with the dollar and percentage change. Source: IRS Rev. Proc. 2025-32 §§3.01 (2025), 4.14 (2026) (2026) and IRS Rev. Proc. 2024-61 §3.01 (2025). Treasury uses a C-CPI-U 12-month average comparison as the inflation measurement base per the methodology described in IRS Publication 17.
| Filing status | 2025 | 2026 | Δ |
|---|---|---|---|
| Single | $15,750 | $16,100 | +$350 |
| Married Filing Jointly | $31,500 | $32,200 | +$700 |
| Married Filing Separately | $15,750 | $16,100 | +$350 |
| Head of Household | $23,625 | $24,150 | +$525 |
| Qualifying Surviving Spouse | $31,500 | $32,200 | +$700 |
Note: Additional standard deduction for age 65+ and blindness is separate and also inflation-adjusted annually per IRS Rev. Proc. 2025-32 §4.01.
Marginal bracket changes
The seven marginal rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — were locked permanently by OBBB §70101 (P.L. 119-21). What changed are the income thresholds at which each rate begins, inflated upward under IRC §1(f) via the Chained CPI-U. Below is the full 2026 bracket table for single filers, followed by a 2025 vs. 2026 side-by-side comparison.
| Rate | 2026 taxable income range (single) |
|---|---|
| 10% | $0 – $12,400 |
| 12% | $12,400 – $50,400 |
| 22% | $50,400 – $105,700 |
| 24% | $105,700 – $201,775 |
| 32% | $201,775 – $256,225 |
| 35% | $256,225 – $640,600 |
| 37% | $640,600+ |
| Rate | 2025 top of bracket | 2026 top of bracket |
|---|---|---|
| 10% | $11,925 | $12,400 |
| 12% | $48,475 | $50,400 |
| 22% | $103,350 | $105,700 |
| 24% | $197,300 | $201,775 |
| 32% | $250,525 | $256,225 |
| 35% | $626,350 | $640,600 |
| 37% | $626,350+ | $640,600+ |
The differing shifts across bracket thresholds reflect the Chained CPI-U measurement basis used under IRC §1(f) and the Treasury inflation methodology (IRS Publication 17). For a single filer with stagnant nominal wages, the higher standard deduction and wider brackets effectively reduce real tax burden without any legislative rate change.
What OBBB adds
The One Big Beautiful Bill Act (P.L. 119-21, enacted 2025) introduced four additional deductions for tax years 2025–2028. They are reported on Schedule 1-A (Form 1040) and reduce taxable income rather than adjusted gross income. They can be claimed by eligible itemizing and non-itemizing taxpayers.
| Deduction | Who qualifies | Cap | Phase-out (MAGI) | Calculator |
|---|---|---|---|---|
| Overtime (Sec. 70202) | FLSA overtime workers; not MFS | $12,500 / $25,000 | $150,000 / $300,000 | Overtime |
| Tips (Sec. 70201) | Workers in IRS-listed tipped occupations | $25,000 | $150,000 / $300,000 | Tips |
| Auto loan interest (Sec. 70203) | New US-assembled vehicle; loan after 12/31/2024 | $10,000 | $100,000 / $200,000 | OBBB impact |
| Senior (Sec. 70103) | Age 65 or older | $6,000 / $12,000 | $75,000 / $150,000 | OBBB impact |
Qualified overtime deduction (OBBB §70202)
Qualified overtime premium compensation, generally the extra half-rate above regular pay for FLSA-required time-and-a-half, may be deducted from federal taxable income, subject to statutory limits and eligibility requirements. The base hourly wage for overtime hours remains taxable; only qualified premium compensation is deductible. The deduction is tied to overtime required by the FLSA and is capped at $12,500 ($25,000 for joint filers). Phase-out begins at higher income levels; the exact threshold was set at $150,000 (single) and $300,000 (MFJ) per P.L. 119-21. Married filing separately is ineligible, and the worker needs a valid SSN. Estimate your overtime deduction.
Qualified tips deduction (OBBB §70201)
Qualified tips reported by eligible workers in occupations recognized by the IRS may qualify for an income-tax deduction of up to $25,000 per year. Tips are still subject to FICA payroll taxes (Social Security and Medicare). Eligibility depends on occupation, reporting, and other IRS requirements. Like the overtime deduction, it phases out above $150,000 modified AGI ($300,000 for joint filers). Estimate your tips deduction.
Auto loan interest deduction (OBBB §70203)
Eligible interest on a qualifying new passenger vehicle loan may be deducted up to $10,000 per year. The vehicle must be new and have final assembly in the United States. The loan must have originated after December 31, 2024, and be secured by a first lien on the vehicle; leases and used-vehicle loans do not qualify. The deduction phases out above $100,000 modified adjusted gross income (MAGI) ($200,000 for joint filers), and is available to eligible itemizers and non-itemizers.
Enhanced senior deduction (OBBB §70103)
Eligible people age 65 or older may claim up to $6,000 each ($12,000 if both spouses qualify on a joint return), in addition to the age-65 standard deduction add-on. The new deduction phases out above $75,000 modified adjusted gross income ($150,000 for joint filers). It stacks with the standard deduction and the existing additional standard deduction for elderly filers under IRC §63(f).
All four Schedule 1-A deductions were enacted in 2025. For qualified tips and overtime, the person claiming the deduction needs a valid work-authorized Social Security number; married filers must file jointly (married filing separately does not qualify). Income phase-outs and other eligibility rules apply. Review the current IRS Schedule 1-A instructions before treating these simplified examples as a filing position.
How this affects your tax bill — three example scenarios
Scenario 1: Single filer, $85,000 W-2 income
| Gross income | $85,000 |
| − Standard deduction (2026, single) | −$16,100 |
| = Taxable income | $68,900 |
| 10% on $0–$12,400 | $1,240 |
| 12% on $12,400–$50,400 ($38,000) | $4,560 |
| 22% on $50,400–$68,900 ($18,500) | $4,070 |
| Estimated 2026 federal tax | $9,870 |
| Effective rate on gross | 11.6% | Marginal: 22% |
Scenario 2: Married Filing Jointly, $200,000 combined W-2 income
| Gross income | $200,000 |
| − Standard deduction (2026, MFJ) | −$32,200 |
| = Taxable income | $167,800 |
| 10% on $0–$24,800 (MFJ 10% bracket) | $2,480 |
| 12% on $24,800–$100,800 | $9,120 |
| 22% on $100,800–$167,800 ($67,000) | $14,740 |
| Estimated 2026 federal tax | $26,340 |
| Effective rate on gross | 13.2% | Marginal: 22% |
Scenario 3: Server — $52,000 base wages + $18,000 tips
Under OBBB §70201 (P.L. 119-21), qualified tips from qualifying tipped occupations are eligible for a federal taxable-income deduction (subject to eligibility and phase-out). Tips remain subject to FICA. This scenario assumes the server qualifies for the tip deduction.
| Base wages | $52,000 |
| Tip income | $18,000 |
| Total gross | $70,000 |
| − Tip deduction (OBBB §70201, up to $25,000) | −$18,000 |
| − Standard deduction (2026, single) | −$16,100 |
| = Taxable income | $35,900 |
| 10% on $0–$12,400 | $1,240 |
| 12% on $12,400–$35,900 ($23,500) | $2,820 |
| Estimated 2026 federal tax | $4,060 |
| Without tip deduction (for comparison) | $6,570 |
| Tax savings from tip deduction | $2,510 |
What has not changed
Several aspects of the federal tax system that taxpayers often ask about are unchanged for 2026:
FICA rates
Social Security payroll tax remains 6.2% for employees on wages up to the Social Security wage base (adjusted by SSA COLA for 2026 but the rate itself is unchanged). Medicare remains 1.45% with an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (MFJ). OBBB did not change FICA rates.
Capital gains rate structure
The preferential 0%, 15%, and 20% long-term capital gains rates are unchanged. OBBB §70101 made this structure permanent. The income thresholds for LTCG brackets inflated upward per Rev. Proc. 2025-32 §4.03, consistent with the ordinary income bracket adjustments. The 3.8% Net Investment Income Tax (NIIT) on high earners under IRC §1411 is also unchanged.
AMT structure
The Alternative Minimum Tax (IRC §55) remains in place with its two-rate structure (26% and 28%). The AMT exemption amount and phase-out threshold are inflation-adjusted annually per Rev. Proc. 2025-32. The AMT does not affect most middle-income filers following the TCJA changes that raised exemptions significantly.
Seven bracket rates
The rate structure itself — 10%, 12%, 22%, 24%, 32%, 35%, 37% — is now permanent law under OBBB §70101 (P.L. 119-21). There is no longer an expiration date on the TCJA rate structure as there was when it was first enacted in 2017.
Frequently asked questions
Quick answers to the most common questions about 2026 federal tax changes.
What is the standard deduction for a single filer in 2026?
Did the 2026 tax bracket rates change from 2025?
What is the OBBB and how does it affect my 2026 taxes?
Are Social Security and Medicare taxes changing in 2026?
How do I estimate my 2026 federal income tax?
Estimate your 2026 tax
Put the numbers from this guide to work. The 2026 federal income tax calculator applies the updated standard deductions, the revised bracket thresholds from IRS Rev. Proc. 2025-32, and the four new OBBB additional deductions (P.L. 119-21) to give you a bracket-by-bracket breakdown, your effective rate, and your marginal rate in seconds. No login required.
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Written by
Last reviewed: November 2026 · Sources: IRS Rev. Proc. 2025-32, IRC §1(f), IRS Publication 17, P.L. 119-21 (OBBB), Treasury Chained CPI-U methodology.
Estimates only — not professional tax advice. Consult a licensed CPA for your specific situation.
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