Today, the Internal Revenue Service released the updated 2026 federal income tax brackets and related adjustments, reflecting inflation and new policy changes under the recently passed “One Big Beautiful Bill Act” (OBBBA).
Under the new schedule, the U.S. retains the seven marginal tax rates of 10 %, 12 %, 22 %, 24 %, 32 %, 35 %, and 37 %. For single filers, the top 37 % rate now applies to taxable incomes above $640,600, while married couples filing jointly reach that bracket at $768,600. The thresholds across all brackets have been raised: the bottom two brackets (10 % and 12 %) saw a 4 % inflation bump under OBBBA, while the rest were adjusted by roughly 2.3 %.
In tandem, the standard deduction increases significantly. Single filers will be able to deduct $16,100, heads of household $24,150, and married couples filing jointly $32,200 before owing federal income tax. Additionally, the OBBBA introduces a $6,000 bonus deduction for taxpayers aged 65 or older (subject to income limits), available whether you itemize or not.
Other notable changes include a boost in the estate tax exemption to $15 million, continuing the policy direction from OBBBA. The legislation also elevated the cap on state and local tax (SALT) deductions to $40,000 through 2029 for many taxpayers.
Tax policy analysts say these adjustments are part of a broader effort to protect Americans from bracket creep—where inflation would push taxpayers into higher brackets without real increases in income. While the changes should offer relief to many middle-income earners, critics warn that some long-term tax credits and deductions—especially related to clean energy and miscellaneous itemized deductions—are being curtailed or eliminated.
Taxpayers are encouraged to review the new brackets in planning their 2026 budgets and withholding strategies as the tax filing season approaches.
Sources:
- Tax Foundation
- MarketWatch
- The Wall Street Journal
- CBS News
- H&R Block Tax preparation company
- Peterson & Associates, P.S.
- Kiplinger
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
