Each year the IRS adjusts many tax numbers — like deductions, credits, and income-bracket thresholds — to keep up with inflation. This year’s updates cover more than 60 tax provisions and incorporate changes from the One, Big, Beautiful Bill Act (OBBBA). These changes help prevent what’s called “bracket creep” (where inflation pushes you into a higher tax rate even if your real income didn’t increase).
Here are some of the key updates that many taxpayers will notice for the 2026 tax season:
- Standard Deduction: For Married Couples Filing Jointly, it rises to $31,500. For Single filers or Married Filing Separately, it rises to $15,750. For Head of Household, it rises to $23,625.
- Income Tax Brackets / Rates: The tax rates themselves (i.e., 10%, 12%, 22%, 24%, 32%, 35%, and 37%) remain unchanged. However, the income thresholds for each bracket are adjusted upward for inflation. For example, in 2025, the top 37% rate applies to Single filers with taxable income over $626,350 or Married Filing Jointly over $751,600.
- Earned Income Tax Credit (EITC): For tax year 2025, the maximum EITC for taxpayers with three or more equalifying children will be $8,046, up from $7,830 in 2024.
- The Foreign Earned Income Exclusion increases to $130,000.
- Personal exemptions remain zero for 2025, as they were in 2024.
- Installations or expenditures made after December 31st, 2025 will no longer qualify for the Residential Clean Energy Credit.
- For the Energy Efficient Home Improvement Credit, after December 31st, 2025, no credit will be allowed unless the item was produced by a qualified manufacturer and the taxpayer reports the Qualified Manufacturer Identification Number (QMID).
If you’re planning your finances, tax-year 2025 (returns filed in 2026) is when these updated amounts apply. It’s a good time to review your withholding, retirement contributions, and other tax-planning strategies.