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Each new tax year brings adjustments that may subtly — or substantially — impact your return. For 2026, the IRS has finalized several updates tied to inflation and recent legislation that affect deductions, credits, and income thresholds. Understanding these changes ahead of time can help you make the right moves before you file. Even small updates can add up depending on your income, household size, and filing status.
Here's a look at the tax changes set to impact returns in 2026.
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The standard deduction is increasing
For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly, up from $31,500 in 2025. Single filers and married individuals filing separately will see the deduction increase to $16,100, up from $15,750. Heads of household will see a standard deduction of $24,150 in 2026, up from $23,625.
A higher standard deduction can reduce taxable income for filers who choose not to itemize.
Tax bracket income thresholds are going up next year
Federal income tax brackets are increasing for 2026 as part of the IRS's annual inflation adjustments. While marginal tax rates themselves are unchanged, higher income thresholds mean more earnings may be taxed at lower rates if pay does not increase at the same pace. For many filers, this can result in a modest reduction in overall tax liability compared with 2025.
Here's how the federal income tax brackets are shifting from 2025 to 2026.
2025 vs. 2026 federal income tax brackets
Below is a closer look at 2025:
| Tax rate | Single | Married filing separately | Married filing jointly | Head of household |
| 10% | $0 - $11,925 | $0 - $11,925 | $0 - $23,850 | $0 - $17,000 |
| 12% | $11,926 - $48,475 | $11,926 - $48,475 | $23,851 - $96,950 | $17,001 - $64,850 |
| 22% | $48,476 - $103,350 | $48,476 - $103,350 |
$96,951 - $206,700 | $64,851 - $103,350 |
| 24% | $103,351 - $197,300 | $103,351 - $197,300 | $206,701 - $394,600 | $103,351 - $197,300 |
| 32% | $197,301 - $250,525 | $197,301 - $250,525 | $394,601 - $501,050 | $197,301 - $250,500 |
| 35% | $250,526 - $626,350 | $250,526 - $375,800 | $501,051 - $751,600 | $250,501 - $626,350 |
| 37% | $626,351 and up | $375,801 and up | $751,601 and up | $626,351 and up |
And here is 2026:
| Tax rate | Single | Married filing separately | Married filing jointly | Head of household |
| 10% | $0 - $12,400 | $0 - $12,400 | $0 - $24,800 | $0 - $17,700 |
| 12% | $12,401 - $50,400 | $12,401 - $50,400 | $24,801 - $100,800 | $17,701 - $67,450 |
| 22% | $50,401 - $105,700 | $50,401 - $105,700 |
$100,801 - $211,400 | $67,451 - $105,700 |
| 24% | $105,701 - $201,775 | $105,701 - $201,775 | $211,401 - $403,550 | $105,701 - $201,750 |
| 32% | $201,776 - $256,225 | $201,776 - $256,225 | $403,551 - $512,450 | $201,751 - $256,200 |
| 35% | $256,226 - $640,600 | $256,226 - $384,350 | $512,451 - $768,700 | $256,201 - $640,600 |
| 37% | $640,601 and up | $384,351 and up | $768,701 and up | $640,601 and up |
These inflation adjustments are designed to prevent taxpayers from being pushed into higher brackets solely because wages keep up with rising prices.
FSA limits are increasing
Flexible Spending Account (FSA) limits are rising for 2026, allowing higher pre-tax contributions. The maximum FSA contribution increases to $3,400, up from $3,300 in 2025, with a carryover limit in 2027 of $680 if you re-enroll.
Dependent Care FSA limits increase to $7,500 per household or $3,750 for individuals and those married filing separately. These changes may help families offset rising health care and child care costs.
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Adoption credits are going up
The adoption tax credit is also increasing for 2026. Eligible taxpayers can claim qualified adoption expenses up to $17,670, compared with $17,280 in 2025. Of that amount, up to $5,120 may be refundable, depending on income and other factors.
This change can provide meaningful relief for families navigating adoption-related expenses.
The basic exclusion for estate taxes will rise
The federal estate tax exclusion increases significantly in 2026. Estates of descendants who pass away during the year will have a basic exclusion amount of $15 million, up from $13.99 million in 2025.
This adjustment may reduce the number of estates subject to the federal estate tax. While most households will likely remain unaffected, the change matters for high-net-worth families engaged in long-term planning.
The Earned Income Tax Credit (EITC) is also going up
The maximum Earned Income Tax Credit (EITC) for 2026 rises to $8,231 for qualifying taxpayers with three or more children, up from $8,046 in 2025.
Because the EITC is refundable, eligible filers may receive a credit even if they owe no tax. This adjustment can increase refunds for low- to moderate-income households.
Why these changes matter when you file
Many of these updates reflect inflation rather than sweeping tax reform, but their combined effect can still influence refunds and balances due. Higher deductions and credits generally benefit filers by lowering taxable income or increasing refunds.
At the same time, eligibility rules and income limits may still apply, which means not everyone will see the same impact. Reviewing changes early can help avoid surprises at filing time.
Bottom line
These tax changes could affect how much you owe — or receive — when you file your 2026 return. Higher deductions, expanded credits, and adjusted brackets may lead to meaningful shifts for many filers, depending on income and filing status.
Understanding how these updates interact with your income and household situation can help you plan more effectively and get ahead financially as the new tax year approaches.
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