IRS Inflation Adjustments Could Mean Bigger Tax Breaks in 2026: Here’s How

Alberta Waelchi Sr.
Published Oct 9, 2025

IRS Inflation Adjustments Could Mean Bigger Tax Breaks in 2026: Here’s How

The Internal Revenue Service (IRS) has released the 2026 tax year inflation adjustments affecting more than 60 tax provisions, including tax brackets, standard deductions, credits, and exclusions.

These updates reflect rising costs and are designed to keep tax thresholds aligned with inflation. The changes will apply to tax returns filed in 2027.

Full details are outlined in Revenue Procedure 2025-32.
 

Standard Deduction Increases

Under the One, Big, Beautiful Bill (OBBB), the standard deduction sees another boost:

  • Single / Married Filing Separately:

    • 2025: $15,750

    • 2026: $16,100

  • Married Filing Jointly:

    • 2025: $31,500

    • 2026: $32,200

  • Head of Household:

    • 2025: $23,625

    • 2026: $24,150

 

Updated Tax Brackets for 2026

  • 37% for income over $640,600 (single) / $768,700 (joint)

  • 35% for income over $256,225 ($512,450 joint)

  • 32% for income over $201,775 ($403,550 joint)

  • 24% for income over $105,700 ($211,400 joint)

  • 22% for income over $50,400 ($100,800 joint)

  • 12% for income over $12,400 ($24,800 joint)

  • 10% for income below $12,400 (single) / $24,800 (joint)

These bracket shifts are designed to limit bracket creep caused by rising wages and inflation.

If you could use a little extra help, see what benefits you can claim here.

 

Key Credit & Exemption Adjustments

 

Earned Income & Fringe Benefits

 

Gift Exclusions & Unchanged Items

 

What This Means for Taxpayers

These inflation adjustments help prevent taxpayers from being pushed into higher tax brackets purely due to inflation, often called “bracket creep.” The increased deductions and credit thresholds offer some tax relief amid rising living costs.

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