2026 Federal Tax Brackets | Statistics & Facts

Federal Income Tax Brackets in the US 2026

Understanding your federal tax bracket is essential for effective financial planning as 2026 approaches, especially given the significant legislative changes enacted through the One Big Beautiful Bill Act (OBBBA) in July 2025. The 2026 tax year brings historic permanence to tax rates that were previously scheduled to expire, ensuring that millions of American taxpayers can plan their finances with greater certainty. The Internal Revenue Service (IRS) released comprehensive inflation adjustments in October 2025, updating more than 60 tax provisions for the upcoming tax year, with these changes applying to income earned in 2026 and tax returns filed in early 2027.

The seven federal income tax brackets for 2026 remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, continuing the progressive tax structure where higher portions of income face incrementally higher rates. Importantly, the OBBBA provided a 4% inflation adjustment for the bottom two brackets and a 2.3% inflation adjustment for the higher brackets, offering more generous thresholds than the standard 2.7% average increase across most tax provisions. These adjustments mean that American workers can earn more money before moving into higher tax brackets, providing protection against “bracket creep” where inflation alone pushes taxpayers into higher rates without real income gains. With the standard deduction rising to $16,100 for single filers and $32,200 for married couples filing jointly, combined with various credit expansions including the $2,200 Child Tax Credit and a new $6,000 senior deduction, the 2026 tax landscape represents one of the most significant restructuring efforts in modern tax policy.

Key Facts and Statistics on Federal Tax Brackets in the US 2026

Data sources: IRS Revenue Procedure 2025-32, Internal Revenue Service official releases, Tax Foundation analysis

The key statistics for the 2026 federal tax brackets reveal both continuity and strategic enhancements designed to benefit American families and individuals across income levels. The maintenance of seven tax brackets ranging from 10% to 37% provides a familiar framework, but the inflation adjustments create meaningful differences in how much income falls into each bracket. The standard deduction increases of $350 for single filers and $700 for married couples may seem modest, but these build on substantial increases enacted in the 2025 tax year when the OBBBA boosted deductions by $750 and $1,500 respectively beyond normal inflation adjustments. The Child Tax Credit holding steady at $2,200 represents a $200 increase from the $2,000 level that existed through 2024, and this amount will now be indexed to inflation beginning in 2026, though low inflation means no increase occurred for this particular year. The Earned Income Tax Credit reaching $8,231 for families with three or more children marks the highest level in history, representing a 2.3% increase that directly benefits working families in lower income brackets. Perhaps most dramatically, the estate tax exclusion jumping to $15 million from $13.99 million represents a $1.01 million increase or 7.2% growth, significantly expanding the amount wealthy individuals can pass to heirs without federal estate taxation.

Individual Tax Brackets and Rates in the US 2026

Data source: IRS Revenue Procedure 2025-32, Tax Foundation official analysis

The individual income tax brackets for 2026 demonstrate a carefully calibrated approach to inflation adjustment that prioritizes relief for lower and middle-income earners. For single filers, the 10% bracket now extends to $12,400 of taxable income, up from $11,925 in 2025, representing a 3.9% increase that exceeds the standard inflation adjustment. This enhanced adjustment continues through the 12% bracket, which now covers income up to $50,400 compared to $48,475 in 2025, allowing single taxpayers to earn an additional $1,925 before entering the 22% bracket. The 4% inflation adjustment for these bottom two brackets contrasts with the 2.3% adjustment applied to higher brackets, reflecting policy priorities to provide proportionally greater relief to working and middle-class Americans. For married couples filing jointly, the brackets essentially double those for single filers, maintaining “marriage neutrality” and avoiding the “marriage penalty” that historically affected two-income households. The top marginal rate of 37% now applies to single filers earning above $640,600 and married couples above $768,600, representing increases of $14,249 and $15,900 respectively from 2025 thresholds.

Standard Deduction Amounts in the US 2026

Data source: IRS official announcements, Revenue Procedure 2025-32

The standard deduction for 2026 represents a cornerstone of the American tax system, reducing taxable income for the vast majority of taxpayers who don’t itemize deductions. With $16,100 available to single filers and $32,200 for married couples filing jointly, these amounts subtract directly from adjusted gross income before any tax calculations occur. While the 2.2% increase from 2025 appears modest, it builds on the substantial enhancements made by the OBBBA in 2025, when the standard deduction received extraordinary boosts of $750 for singles and $1,500 for joint filers beyond normal inflation adjustments. Taxpayers aged 65 and older benefit from an additional standard deduction of $2,050 if single or $1,650 per person if married, allowing a 65-year-old married couple to claim a combined $35,500 standard deduction before even considering the new senior benefit. The $6,000 senior deduction introduced by the OBBBA provides unprecedented additional relief for older Americans, available regardless of whether they itemize or claim the standard deduction, though it phases out at 6% for incomes exceeding $75,000 for singles and $150,000 for married couples. This means a single senior with income of $90,000 would see their $6,000 senior deduction reduced by $900 (6% of the $15,000 over the threshold), leaving them with a $5,100 senior deduction.

Capital Gains Tax Rates and Brackets in the US 2026

Data sources: IRS Revenue Procedure 2025-32, Kiplinger tax analysis, Bankrate financial data

The capital gains tax structure for 2026 maintains the favorable treatment of long-term investments held for more than one year, with rates of 0%, 15%, and 20% significantly below ordinary income tax rates. For single filers, the 0% capital gains rate now extends to taxable income of $49,450, an increase of $1,100 from the $48,350 threshold in 2025, allowing investors to realize an additional $1,100 in gains tax-free. Married couples filing jointly benefit even more dramatically, with the 0% bracket reaching $98,900, a $2,200 increase that enables couples to potentially harvest tens of thousands of dollars in long-term gains completely tax-free depending on their other income. The 15% rate applies to the vast middle range of incomes, extending up to $545,500 for single filers and $613,700 for married couples, with the upper thresholds increasing by $12,100 and $13,650 respectively. Only the highest earners face the 20% long-term capital gains rate, and even this remains well below the 37% top ordinary income rate. However, high-income investors must also consider the Net Investment Income Tax (NIIT) of 3.8%, which applies to investment income when modified adjusted gross income exceeds $200,000 for singles or $250,000 for married couples (thresholds not adjusted for inflation). This means the highest effective rate on long-term capital gains can reach 23.8% (20% + 3.8%) for wealthy investors. Short-term capital gains on assets held one year or less receive no preferential treatment and are taxed as ordinary income at rates from 10% to 37%.

Alternative Minimum Tax (AMT) in the US 2026

Data source: IRS Revenue Procedure 2025-32, Tax Foundation AMT analysis

The Alternative Minimum Tax remains a critical consideration for high-income earners in 2026, designed to ensure wealthy taxpayers pay at least a minimum amount of tax regardless of deductions and credits. The exemption amounts increased modestly to $90,100 for single filers and $140,200 for married couples, up $2,000 and $3,200 respectively from 2025, allowing more income to escape AMT calculation. However, the OBBBA made a significant change by reverting phaseout thresholds to 2018 levels, removing the inflation adjustments that had been applied from 2019-2025. This means the exemption begins phasing out at $500,000 for single filers (down from $626,350 in 2025) and $1 million for married couples (down from $1,252,700), substantially lowering the income levels where AMT becomes more likely to apply. For every $1 of income above these thresholds, the exemption phases out by $0.25, completely eliminating it at $680,200 for singles and $1,280,400 for married couples. The AMT applies a 26% rate on the first portion of Alternative Minimum Taxable Income (AMTI) and 28% on amounts above $232,600, regardless of filing status. Common AMT triggers include incentive stock option exercises, private activity municipal bond interest, large state and local tax deductions, and significant long-term capital gains. Taxpayers calculate both their regular tax and AMT, paying whichever is higher, making this particularly relevant for executives, investors, and residents of high-tax states.

Child Tax Credit and Family Benefits in the US 2026

Data sources: IRS official releases, Tax Policy Center estimates, Kiplinger family tax analysis

The Child Tax Credit for 2026 provides $2,200 per qualifying child under age 17, representing one of the most valuable family tax benefits available to American households. The Tax Policy Center estimates that approximately 90% of families with children received the credit in 2025, with an average benefit of $2,520—higher than the per-child maximum because many families have multiple qualifying children. The credit reduces tax liability dollar-for-dollar, and if the credit exceeds taxes owed, families may receive up to $1,700 per child as a refund through the Additional Child Tax Credit (ACTC). To qualify for the ACTC, families must have at least $2,500 in earned income, with the refundable amount calculated as 15% of earnings above this threshold up to the $1,700 maximum per child. The full credit is available to single filers earning up to $200,000 and married couples earning up to $400,000, after which it phases out by $50 for every $1,000 of income above these thresholds. The OBBBA tightened eligibility by requiring that both children and parents have Social Security Numbers, with at least one parent in married couples needing an SSN. The Child and Dependent Care Credit received a dramatic enhancement, increasing from a maximum 35% of qualifying expenses to 50% for lower-income families, with up to $3,000 in expenses covered for one dependent or $6,000 for two or more. The $6,000 senior deduction benefits approximately 55 million Americans aged 65 and older, phasing out gradually for those with higher incomes but providing substantial relief for seniors paying taxes on Social Security and pension income.

Estate and Gift Tax Provisions in the US 2026

Data source: IRS Revenue Procedure 2025-32, estate planning analysis

The estate tax exemption for 2026 reaches an unprecedented $15 million per individual or $30 million for married couples, representing one of the most significant wealth transfer benefits in modern tax history. This dramatic increase of $1,010,000 from the $13.99 million exemption in 2025 means that fewer than 0.1% of American estates will owe any federal estate tax. The OBBBA made this exemption permanent, resolving uncertainty about whether it would revert to lower pre-2017 levels. Estates valued above the exemption amount face a flat 40% tax rate on the excess, one of the highest rates in the tax code. The $19,000 annual gift exclusion allows individuals to give this amount to unlimited recipients each year without filing gift tax returns or using any lifetime exemption, meaning a couple could gift $38,000 per recipient annually completely tax-free. For non-citizen spouses, a special increased annual exclusion of $194,000 applies to avoid estate tax issues when transferring wealth to spouses who aren’t US citizens. The portability provision allows surviving spouses to use any unused exemption from a deceased spouse, potentially providing up to $30 million in combined exemptions for married couples. The Generation-Skipping Transfer Tax uses the same $15 million exemption, allowing wealthy individuals to transfer substantial assets to grandchildren or later generations without triggering this additional tax designed to prevent avoidance of estate taxes across multiple generations.

Retirement Account Contribution Limits in the US 2026

Data sources: IRS official announcements, retirement planning industry data

The retirement account contribution limits for 2026 continue their upward trajectory, providing American workers with expanded opportunities to save for retirement on a tax-advantaged basis. The $23,500 limit for 401(k), 403(b), and governmental 457 plans represents a $500 increase from 2025, with workers aged 50 and older eligible to contribute an additional $7,500 in catch-up contributions for a total of $31,000. These contributions reduce taxable income dollar-for-dollar in the year made for traditional accounts, or grow tax-free for Roth versions. The IRA contribution limit holds steady at $7,000 for both Traditional and Roth IRAs, with the $1,000 catch-up provision allowing those 50 and older to contribute $8,000 total. However, income limits apply to Roth IRA contributions and the deductibility of Traditional IRA contributions when covered by workplace retirement plans, with these thresholds also adjusted annually for inflation. SIMPLE IRAs reach $16,500 in employee deferrals, a $500 increase, with a $3,500 catch-up bringing the total to $20,000 for older workers. SEP IRAs allow the highest contributions at $70,000 or 25% of compensation, whichever is less, making them attractive for self-employed individuals and small business owners with high incomes. Health Savings Accounts increase to $4,300 for individual coverage and $8,550 for family coverage, with these triple-tax-advantaged accounts (deductible contributions, tax-free growth, tax-free withdrawals for qualified medical expenses) representing one of the most powerful savings vehicles available. Individuals aged 55 and older can contribute an additional $1,000 to HSAs, effectively creating a supplemental retirement savings vehicle for healthcare costs.

Earned Income Tax Credit Amounts in the US 2026

Data source: IRS Revenue Procedure 2025-32, EITC official tables

The Earned Income Tax Credit for 2026 represents the most substantial anti-poverty tax benefit in the federal tax code, providing refundable credits that can exceed $8,000 for working families with multiple children. The $8,231 maximum credit for families with three or more qualifying children marks a $185 increase from the $8,046 available in 2025, though families must have earned income of at least $2,500 to qualify. The EITC is fully refundable, meaning families receive the full credit amount even if it exceeds their tax liability, making it a direct income supplement for low and moderate-income workers. The credit phases in as earnings increase, reaching its maximum at different income levels depending on the number of children, then phases out gradually to avoid creating a “cliff effect” where earning slightly more money results in losing all benefits. For a family with three children, the credit reaches its $8,231 maximum at approximately $15,310 of earned income and remains at this level until earnings reach $19,520 for single filers or $25,820 for married couples, after which it phases out completely at $63,398 for singles or $69,698 for married filers. Childless workers receive a much smaller maximum credit of $649, with income limits much lower than for those with children, phasing out completely at $18,591 for singles and $24,891 for married couples. The EITC directly lifted approximately 6.4 million people out of poverty in 2023, including 2 million children, according to Census Bureau estimates, making it one of the most effective anti-poverty programs in American social policy.

Special Tax Provisions and New Benefits in the US 2026

Data sources: IRS official releases, OBBBA legislation analysis, tax planning resources

The special tax provisions for 2026 include several groundbreaking benefits enacted through the OBBBA that fundamentally reshape taxation for specific groups of workers. The tip income exclusion allows service industry workers to earn up to $25,000 in tips completely free from federal income tax for the 2025 and 2026 tax years, though these amounts remain subject to Social Security and Medicare taxes and must still be reported to the IRS. This provision affects millions of restaurant servers, bartenders, hairstylists, and other tipped employees across the country. Similarly, the overtime income exclusion makes up to $25,000 in overtime pay tax-free for hourly workers and certain salaried employees, providing substantial benefits to workers in manufacturing, healthcare, and other industries where overtime is common. The universal charitable deduction beginning in 2026 allows non-itemizers to deduct up to $1,000 for single filers or $2,000 for married couples filing jointly for cash donations to qualified charities, potentially benefiting 144 million Americans according to estimates. This reverses the situation where only the approximately 10% of taxpayers who itemize could benefit from charitable deductions. The foreign earned income exclusion reaching $132,900 benefits Americans working abroad, allowing them to exclude nearly $133,000 in foreign wages from US taxation (though they remain subject to local taxes in their country of residence). The employer-provided childcare credit jumping from $150,000 to $500,000 (or $600,000 for small businesses) provides unprecedented incentives for employers to establish on-site childcare facilities or subsidize childcare expenses for employees.

Tax Planning Strategies for the US 2026 Tax Year

Data sources: Tax planning best practices, financial advisor recommendations, IRS guidance

Strategic tax planning for the 2026 tax year can generate thousands of dollars in savings for individuals and families who understand how to leverage the bracket structure and available benefits. Maximizing retirement contributions remains one of the most powerful strategies, with a worker in the 32% tax bracket contributing the full $23,500 to a traditional 401(k) saving $7,520 in federal taxes immediately, plus state tax savings in most locations. For those aged 50 and older, the additional $7,500 catch-up contribution saves an extra $2,400 at the 32% rate. Tax-loss harvesting involves selling investments trading below their purchase price to generate losses that can offset capital gains, with up to $3,000 of excess losses deductible against ordinary income annually. Bunching charitable donations works particularly well under the new universal charitable deduction, where taxpayers can claim $1,000 or $2,000 annually without itemizing, then in alternating years make large charitable contributions to exceed the $32,200 standard deduction for married couples and itemize those years. Roth conversions allow taxpayers to convert traditional IRA balances to Roth IRAs, paying taxes now but enjoying tax-free growth and withdrawals in retirement—particularly valuable for those in the 22% or 24% brackets who expect to be in higher brackets during retirement. Capital gains timing enables lower-income retirees or those with temporarily reduced income to realize long-term gains in years when their taxable income stays within the 0% capital gains bracket, paying no federal tax on potentially tens of thousands in investment profits. The senior deduction requires careful income planning, as earning just $1 above the $75,000 or $150,000 thresholds begins eroding the $6,000 deduction at a 6% rate, making strategies like deferring income or increasing deductions particularly valuable for those near these boundaries.

State and Local Tax Deduction (SALT) in the US 2026

Data sources: Tax Foundation analysis, state tax policy research, IRS statistics

The State and Local Tax (SALT) deduction remains one of the most contentious elements of the 2026 tax code, with the $10,000 cap now permanently established by the OBBBA rather than expiring after 2025 as originally scheduled. This limitation particularly affects residents of high-tax states like California, New York, New Jersey, Connecticut, and Massachusetts, where combined state income taxes and property taxes frequently exceed $10,000—often substantially. A family in Westchester County, New York paying $15,000 in property taxes and $12,000 in state income taxes can deduct only $10,000 of the combined $27,000, effectively losing $17,000 in deductions compared to pre-2017 law. For taxpayers in the 37% bracket, this translates to $6,290 in additional federal taxes annually. Married couples filing separately face an even harsher $5,000 cap each, creating a significant marriage penalty for dual high-earner households in expensive areas. Taxpayers must choose between deducting state income taxes or sales taxes (whichever is higher) plus property taxes, with the combined total capped at $10,000. However, 36 states have implemented Pass-Through Entity Tax (PTET) workarounds that allow business owners operating as S-corporations, partnerships, or LLCs to pay state taxes at the entity level, making them fully deductible business expenses rather than personal SALT subject to the cap. This has created a two-tiered system where business owners can often deduct their full state tax burden while W-2 employees remain capped, even if they earn similar incomes. According to Tax Foundation analysis, approximately 13.1 million households were affected by the SALT cap in 2023, with the average capped household losing $5,400 in deductions.

Business Tax Provisions and Deductions in the US 2026

Data sources: IRS Revenue Procedure 2025-32, business tax policy analysis, accounting industry data

The business tax provisions for 2026 reflect a mix of permanent tax relief and the scheduled phase-out of temporary incentives. The 21% corporate tax rate for C-Corporations and the 20% Qualified Business Income (QBI) deduction for pass-through entities are now permanent rather than scheduled to expire, providing long-term certainty for business planning. The QBI deduction allows owners of S-corporations, partnerships, sole proprietorships, and LLCs to deduct up to 20% of qualified business income, effectively reducing the top tax rate on business income from 37% to 29.6% for those who fully qualify. However, specified service businesses including doctors, lawyers, accountants, and consultants face income-based limitations, with the deduction phasing out completely for single filers above $494,600 (threshold of $394,600 plus $100,000 phase-out range) and married couples above $989,200. The complete elimination of bonus depreciation in 2026 represents a significant change, as businesses could previously deduct 60% of equipment costs in the first year (down from 100% in earlier years). Companies must now rely on regular depreciation schedules or the Section 179 expensing election, which allows immediate deduction of up to $1,250,000 in equipment purchases, though this amount phases out dollar-for-dollar for total purchases exceeding $3,130,000. The business mileage rate is expected to increase to approximately 70 cents per mile based on inflation trends, allowing deductions for business vehicle use. The 50% deduction for business meals has become permanent, down from the 100% deduction that was temporarily available during the pandemic recovery period.

Medical and Health-Related Tax Provisions in the US 2026

Data sources: IRS official releases, healthcare tax policy analysis

The medical and health-related tax provisions for 2026 provide important opportunities for tax savings related to healthcare costs, which represent a significant expense for many American families. The medical expense deduction threshold of 7.5% of Adjusted Gross Income has been made permanent by the OBBBA, down from the 10% threshold that existed previously. This means a taxpayer with $100,000 AGI can deduct qualified medical expenses exceeding $7,500, including insurance premiums (if self-employed or exceeding AGI threshold), prescription medications, dental care, vision care, long-term care, and certain medical equipment. Only taxpayers who itemize deductions can claim this benefit, and with the standard deduction at $32,200 for married couples, medical expenses must be substantial to make itemizing worthwhile. Health Savings Accounts remain one of the most tax-advantaged savings vehicles available, with triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. The $4,300 individual and $8,550 family contribution limits apply only to those with High-Deductible Health Plans (HDHPs) meeting minimum deductible requirements of $1,650 individual or $3,300 family. Flexible Spending Accounts (FSAs) allow employees to set aside $3,400 in pre-tax dollars for healthcare expenses, with the added benefit of a $680 carryover to the following year, preventing the complete loss of unused funds. Unlike HSAs, FSA funds generally must be used within the plan year or shortly thereafter, making careful planning essential to avoid forfeiting contributions.

Education Tax Credits and Deductions in the US 2026

Data sources: IRS education tax benefits, college financing analysis

The education tax credits for 2026 provide valuable assistance to families paying for college, graduate school, and continuing education, though income limitations prevent high earners from claiming these benefits. The American Opportunity Tax Credit (AOTC) offers up to $2,500 per eligible student for the first four years of post-secondary education, calculated as 100% of the first $2,000 in qualified expenses plus 25% of the next $2,000. Notably, 40% of the credit (up to $1,000) is refundable, meaning families can receive it even if they owe no taxes. The credit phases out for single filers with Modified Adjusted Gross Income (MAGI) between $80,000 and $90,000 and for married couples between $160,000 and $180,000. The Lifetime Learning Credit provides up to $2,000 per tax return (not per student) for unlimited years of post-secondary education, making it valuable for graduate students, part-time students, and those taking continuing education courses. This credit uses the same income phase-out ranges as the AOTC. Taxpayers cannot claim both credits for the same student in the same year, requiring strategic planning to maximize benefits. The student loan interest deduction allows up to $2,500 in deduction for interest paid on qualified education loans, phasing out at higher income levels of $95,000 for singles and $195,000 for married couples. 529 college savings plans continue to offer tax-free growth and withdrawals when used for qualified education expenses, with no income limitations, making them accessible to all families regardless of income level. Contributions are not federally deductible but many states offer state income tax deductions or credits for 529 contributions.

Self-Employment Tax and Independent Contractor Provisions in the US 2026

Data sources: IRS self-employment tax guidance, independent contractor tax analysis

The self-employment tax for 2026 represents a significant burden for the growing number of independent contractors, freelancers, and gig economy workers, who must pay both the employee and employer portions of Social Security and Medicare taxes. The combined 15.3% self-employment tax consists of 12.4% for Social Security on the first $176,100 of net self-employment earnings (up from $168,600 in 2025) and 2.9% for Medicare on all net earnings with no cap. High-earning self-employed individuals also pay an Additional Medicare Tax of 0.9% on net self-employment income exceeding $200,000 for single filers or $250,000 for married couples filing jointly. Unlike employees who split these taxes with employers, self-employed individuals pay the full amount, though they can deduct 50% of self-employment tax (the employer-equivalent portion) in calculating Adjusted Gross Income. For example, a self-employed consultant earning $150,000 net pays $21,186 in self-employment tax ($150,000 × 15.3% – adjustment) but can deduct $10,593 when calculating taxable income. The Qualified Business Income (QBI) deduction provides critical relief, allowing pass-through business owners to deduct 20% of qualified business income, effectively reducing the top rate on business profits from 37% to 29.6%. The simplified home office deduction allows $5 per square foot for up to 300 square feet ($1,500 maximum), providing an easier alternative to tracking actual expenses. Self-employed individuals must make quarterly estimated tax payments covering both income tax and self-employment tax, with payments due April 15, June 15, September 15, and January 15, and must pay at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if AGI exceeded $150,000) to avoid underpayment penalties.

Tax Filing Requirements and Deadlines in the US 2026

Data sources: IRS filing requirements, tax deadline schedules

The tax filing requirements for 2026 income dictate that most Americans must file returns by April 15, 2027, though income thresholds vary significantly based on filing status, age, and income type. Single filers under age 65 must file if gross income reaches $16,100—exactly equal to the standard deduction—while those 65 and older have a higher threshold of $18,150 due to the additional standard deduction. Married couples filing jointly both under 65 must file with combined income of $32,200, increasing to $33,850 if one spouse is 65+ and $35,500 if both are seniors. However, self-employed individuals face a drastically lower threshold of just $400 in net self-employment income, designed to ensure Social Security and Medicare taxes are paid on self-employment earnings. Head of household filers must file with income of $24,150, a status available to unmarried individuals paying more than half the cost of maintaining a home for a qualifying dependent. Taxpayers unable to file by April 15 can request an automatic six-month extension to October 15, 2027, though this only extends the filing deadline, not the payment deadline—taxes owed must still be paid by April 15 to avoid interest and penalties. Estimated tax payments remain due quarterly for those with income not subject to withholding, with the 2026 tax year requiring payments on April 15, June 15, and September 15, 2026, plus January 15, 2027. Students and families completing FAFSA applications for the 2027-2028 school year will use information from 2025 tax returns, encouraging early filing to facilitate financial aid processing. Retirees who turned 73 in 2026 must take their first Required Minimum Distribution (RMD) from traditional IRAs and 401(k) accounts by December 31, 2026 (or by April 1, 2027 for the first RMD only).

Impact of One Big Beautiful Bill Act on 2026 Taxes

Data sources: One Big Beautiful Bill Act legislative analysis, Tax Policy Center estimates, Tax Foundation research

The One Big Beautiful Bill Act (OBBBA) signed into law in July 2025 fundamentally reshaped the 2026 tax landscape by making permanent numerous provisions that were scheduled to expire after 2025 while adding several entirely new tax benefits. The permanence of current tax brackets and rates eliminated uncertainty that had plagued tax planning, as the rates were originally set to revert to pre-2017 levels with a top rate of 39.6% instead of 37%. The standard deduction permanence at enhanced levels ensures that approximately 90% of taxpayers will continue taking the standard deduction rather than itemizing, simplifying tax filing for most Americans. The Child Tax Credit increase to $2,200 with inflation indexing means this amount will grow annually, though the Social Security Number requirement for both children and parents tightened eligibility, potentially affecting mixed-status families. The $6,000 senior deduction represents one of the most significant new benefits, providing additional tax relief to approximately 55 million Americans aged 65 and older beyond the existing additional standard deduction, though the phase-out beginning at $75,000 for singles and $150,000 for couples limits benefits for higher-income seniors. The tip and overtime income exclusions could benefit as many as 4 million tipped workers and tens of millions of hourly employees, though the $25,000 cap and complexity of implementation have generated concerns. The universal charitable deduction allowing non-itemizers to deduct up to $2,000 in cash donations reverses decades of policy limiting charitable deductions to itemizers. However, the permanent SALT cap at $10,000 continues to significantly impact residents of high-tax states, with approximately 13 million households losing an average of $5,400 in deductions annually. The new limitation on itemized deductions for those in the 37% bracket to a 28% benefit effectively adds 9 percentage points to the tax rate for high-income itemizers, partially offsetting other benefits for the wealthy.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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