The 2026 Tax Brackets: What’s Changing and How to Prepare

Investopedia reported on January 5, 2026 that the IRS has updated the federal tax brackets for the 2026 tax year. These changes are designed to keep pace with inflation and reflect new deductions and credits created under recent tax legislation.

Understanding these updates now can help you plan ahead and avoid surprises when you file your 2026 taxes.

Why the 2026 Tax Brackets Matter

For 2026, tax bracket income thresholds increased by about 2.3%. This adjustment is meant to prevent “bracket creep,” where inflation alone pushes people into higher tax brackets.

In practical terms, this means:

• If your income rises by less than 2.3%, you’ll likely be taxed at the same rate as before
• If your income rises more than that, you may move into a higher bracket

Knowing this ahead of time can help you better estimate how much of your paycheck you’ll actually keep.

2026 Federal Tax Brackets at a Glance

Here are the federal income tax brackets for 2026, as reported by Investopedia:

• 10%
  Up to $12,400 (single or married filing separately)
  Up to $24,800 (married filing jointly)
• 12%
  $12,401 to $50,400 (single)
  $24,801 to $100,800 (joint)
• 22%
  $50,401 to $105,700 (single)
  $100,801 to $211,400 (joint)
• 24%
  $105,701 to $201,775 (single)
  $211,401 to $403,550 (joint)
• 32%
  $201,776 to $256,225 (single)
  $403,551 to $512,450 (joint)
• 35%
  $256,226 to $640,600 (single)
  $512,451 to $768,700 (joint)
• 37%
  $640,601 and above (single)
  $768,701 and above (joint)

Standard Deduction Increases

The standard deduction is also rising in 2026. Estimated amounts include:

• $16,100 for single filers or married filing separately
• $32,200 for married filing jointly
• $24,150 for heads of household

Higher standard deductions mean more of your income may be shielded from taxes before tax rates are applied.

New and Expanded Tax Breaks

Recent tax changes expanded several deductions and credits that may reduce tax bills for many households. According to Investopedia, these updates could lower average taxes for middle-income households and provide modest relief for lower-income taxpayers as well.

Because of these changes, some people may be able to:

• Adjust their paycheck withholding
• Keep more money throughout the year
• Still avoid a large tax bill at filing time

How to Prepare Now

A few simple steps can help you prepare for the 2026 tax year:

• Review your current income and expected changes
• Check your withholding to make sure it still makes sense
• Factor in any new deductions or credits you may qualify for

Spending a little time planning now can make next year’s tax season smoother and help you make informed decisions about your money.

Read more: https://www.investopedia.com/the-2026-tax-brackets-what-s-changing-and-how-to-prepare-11869488?hid=4157ecd4b730679483b06683d0f929011355aa9a&did=21276127-20260105&utm_campaign=investopedia-daily_newsletter&utm_source=investopedia&utm_medium=email&utm_content=010526&lctg=4157ecd4b730679483b06683d0f929011355aa9a&lr_input=df5dc48e169819b64f8be01ac8af7057ca80a230b9926e3cd21b3493b28f8c89&utm_term=midday