The IRS has released its annual inflation adjustments for tax year 2026 (returns filed in 2027), incorporating changes from the "One Big Beautiful Bill (OBBB)". Should you wish to chat about tax, estate, or other financial planning topics please select a convenient time here: JWA Schedule
Below are, in our opinion, the most important IRS updates for individuals and businesses.
Standard Deduction Increases
- Married Filing Jointly: $32,200 (up from $31,500 in 2025)
- Single / Married Filing Separately: $16,100 (up from $15,750)
- Head of Household: $24,150 (up from $23,625)
2026 Tax Brackets for Single Filers (Joint Filer thresholds are double these amounts):
Rate | Income Over
10% | $0 – $12,400
12% | $12,401 – $50,400
22% | $50,401 – $105,700
24% | $105,701 – $201,775
32% | $201,776 – $256,225
35% | $256,226 – $640,600
37% | $640,601+
Other Key Changes:
- Alternative Minimum Tax Exemption Amounts:
- $90,100 for unmarried individuals with phase out beginning at $500,000
- $140,200 for married couples filing jointly, exemption begins to phase out at $1,000,000
- Estate Tax Exclusion: $15 million (up from $13.99M in 2025)
- Gift Tax Annual Exclusion: $19,000 ($194,000 for non-citizen spouses)
- Employer Childcare Credit: Up to $500,000 ($600,000 for small businesses)
Planning Notes
- Personal exemptions remain $0 (made permanent under OBBB)
- Itemized deduction limitations eliminated (except for 37% bracket cap)
Full details: IRS 2026 Inflation Adjustments