The IRS has released key tax law updates for tax year 2026, including inflation adjustments and changes from the One, Big, Beautiful Bill Act (OBBB). These updates will affect your tax return, deductions, credits, and planning choices next year. You can view the IRS official announcement here:
🔗 https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill IRS
1. Standard Deductions Increase
- Single filers: $16,100
- Married filing jointly: $32,200
- Heads of household: $24,150
These higher amounts help reduce taxable income for most taxpayers. IRS
2. Updated Tax Brackets
The current seven federal tax rates remain: 10%, 12%, 22%, 24%, 32%, 35%, 37%.
The income thresholds for each bracket are raised for inflation, which helps prevent “bracket creep.” IRS
3. Alternative Minimum Tax (AMT) Changes
- Single filers AMT exemption: $90,100
- Married filing jointly AMT exemption: $140,200
These adjusted dollar amounts make it less likely for many taxpayers to be pushed into AMT. IRS
4. Child Tax and Other Credits Adjust
- Adoption tax credit increases to $17,670, up from $17,280 (with up to $5,120 potentially refundable).
- Many credits and phaseout ranges also increase with inflation to help families keep more of their money. IRS
5. Estate Tax Exclusion Rises
For 2026, the federal estate tax exclusion rises to $15 million per person, up from $13.99 million in 2025. This benefits estate planning for higher net worth individuals and families. IRS
6. Qualified Benefits and Limits Increase
Some additional 2026 adjustments include:
• Higher limits on health flexible spending accounts and related cafeteria plans
• Increased foreign earned income exclusion (important for U.S. citizens abroad)
• Greater qualified transportation fringe and parking benefit limits
These changes help taxpayers keep more of what they earn. IRS
Why This Matters to You
These updates are more than number changes on paper. They:
✔ Help more of your income stay untaxed
✔ Help prevent small inflation bumps from pushing you into a higher tax bracket
✔ Increase key credits that may lower your tax bill
✔ Affect planning strategies for retirement, investments, education savings, and estate planning
Understanding the updates now helps you plan smartly before the next tax season begins.
Pro Tip
Even small annual changes can make a big difference in your refund or amount owed. If your income, household size, or financial situation changed in 2025, you may want to adjust your withholding or estimated tax payments.