- The IRS published inflation-adjusted tax brackets for 2026.
- Overall changes reflect a 2.7% inflation level, slightly lower than current rate.
- Changes made in the budget bill give taxpayers bigger personal deductions this year.
Persistent inflation continues to drive up the cost of basic necessities as well as a wide spectrum of goods and services.
But that metric could also help save you a few bucks depending on your income level, following the newly published results of the Internal Revenue Service’s annual, inflation-based adjustments to U.S. income tax brackets.
While new income bracket ranges will go into effect for the 2026 tax year, some tax changes stipulated in the federal tax-and-spending bill passed earlier this year will impact 2025 filings.
For 2026, the IRS made inflation-based adjustments of 4% for the lowest of the seven-tiered bracket system and 2.3% for higher earners. Overall, the adjustments averaged out to 2.7%, a level just under the most recent federal annual inflation reading of 2.9%.
Here are the 2026 tax brackets in a chart assembled by Fidelity Investments:
| Tax rate | Single filers | Married couples filing jointly | Married couples filing separately | Head of household |
|---|---|---|---|---|
| 10% | $12,400 or less | $24,800 or less | $12,400 or less | $17,700 or less |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $12,401 to $50,400 | $17,701 to $67,450 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 | $50,401 to $105,700 | $67,451 to $105,700 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 | $105,701 to $201,775 | $105,701 to $201,750 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 | $201,776 to $256,225 | $201,751 to $256,200 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 | $256,225 to $384,350 | $256,201 to $640,600 |
| 37% | $640,600 or more | $768,701 or more | $384,351 or more | $640,601 or more |
For the 2025 tax year, changes approved by Congress raised the standard deduction to $15,750 for single filers, up from the previously scheduled level of $15,000. For married couples filing jointly, it will be $31,500, up from $30,000. And for heads of households, the standard deduction will be $23,625, up from $22,500.
How the changes will impact filers’ tax liability is dependent on a variety of factors including, family size, income and the number of claimed deductions.
But generally speaking, “many taxpayers will see modest ‘relief’ simply because the deductions and thresholds move upward. Inflation will take less of a bite,” Tom O’Saben, director of tax content at the National Association of Tax Professionals, told CNN.
What is an effective tax rate?
The IRS uses a progressive system to calculate the tax owed on income in the U.S. and while the bracket divisions illustrate marginal rates for different levels of income, what a taxpayer actually pays is called the effective tax rate, which is lower than your top rate.
The tax code has seven income-tax brackets for individuals with accompanying tax rates that range from 10% to 37%. The 10% rate takes effect at the first dollar of taxable income, after benefits such as the standard deduction are applied, according to a breakdown by the Wall Street Journal. As your taxable income moves up the ladder of brackets, each layer gets taxed at progressively higher rates.
Your marginal rate, or top rate, is the highest rate that applies to you. It aligns with the highest bracket you will fall into — what you pay on your last dollar of income.
A few IRS facts
- According to the agency, during fiscal year 2024, the IRS collected more than $5.1 trillion in gross taxes, processed more than 266.6 million tax returns and other forms and issued nearly $490.6 billion in tax refunds.
- In FY 2024, nearly 62.2 million taxpayers were assisted by calling or visiting an IRS office.
- IRS.gov received approximately 690 million visits and taxpayers downloaded about 454 million files.
- In FY 2024, the IRS closed 505,514 tax return audits, resulting in over $29 billion in recommended additional tax.