Summary
The IRS has announced changes for the tax year 2026. The updates include adjustments to tax brackets, deductions, and tax credits, largely due to legislative changes and modest inflation. These changes will affect how much individuals and couples pay in taxes when they file in 2027.
Key Facts
- The IRS adjusts tax numbers each year to prevent "bracket creep," where inflation might push taxpayers into higher tax brackets.
- Since the Tax Cuts and Jobs Act of 2017, the IRS uses a measure called the Chained Consumer Price Index (C-CPI) to adjust these figures.
- In July 2025, Congress passed the One Big Beautiful Bill Act, making many provisions from President Donald Trump's 2017 tax law permanent.
- The IRS expects a 2.7% rise in inflation-adjusted tax numbers for 2026.
- For 2026, the standard deduction increases by $350 for single filers and $700 for joint filers compared to 2025.
- Taxpayers aged 65 and older can claim an extra deduction of $2,050 if single, or $1,650 if filing jointly.
- A new $6,000 senior deduction is available, with restrictions based on income.
- All 2026 updates apply to that tax year, influencing returns filed in early 2027.
