What's Changing in 2026
From updated tax bracket thresholds and a higher standard deduction to unresolved TCJA expiration questions, here's what every taxpayer should know heading into 2026 — with an interactive calculator to see your personal impact.
Key Changes for 2026
Tax Bracket Thresholds Increase
Lower taxesAll seven federal tax bracket thresholds rise ~2.8% for inflation.
The IRS adjusts bracket thresholds annually for inflation. For 2026, the 22% bracket for single filers starts at $49,725 (up from $48,475 in 2025). This means slightly more income is taxed at lower rates. The 10/12/22/24/32/35/37% TCJA rate schedule is permanent under OBBBA.
Standard Deduction Increases
Lower taxesSingle: $16,100 (up from $15,750). Married filing jointly: $32,200 (up from $31,500).
The standard deduction rises with inflation, reducing taxable income for most filers. OBBBA made the TCJA doubled standard deduction permanent.
OBBBA Made Key TCJA Provisions Permanent
Lower taxesNo sunset — lower individual rates, doubled standard deduction, $2,200 child tax credit, QBI, higher estate exemption are all permanent.
The One Big Beautiful Bill Act, signed July 2025, permanently extended the TCJA individual provisions that were set to expire after 2025. The 10/12/22/24/32/35/37% rate schedule, doubled standard deduction, Section 199A qualified business income deduction, and increased estate/gift exemption (now $15 million base for 2026) are all permanent. The child tax credit was permanently raised to $2,200 for 2025.
Child Tax Credit: $2,200 (Permanent)
Lower taxesOBBBA permanently raised the child tax credit to $2,200 per qualifying child.
OBBBA made the enhanced child tax credit permanent and raised it to $2,200 per qualifying child for 2025, up from the $2,000 TCJA level. The credit is indexed for inflation going forward.
SALT Deduction Cap: $40,400 with Phaseout
Lower taxesOBBBA raised the SALT cap to $40,400 ($20,200 MFS), with a phaseout above $505,000 AGI.
Effective for 2025 and later, OBBBA raised the state and local tax (SALT) deduction cap from $10,000 to $40,400 ($20,200 for MFS). The cap phases down $1-for-$1 for every dollar of AGI above $505,000 ($252,500 MFS), reverting toward the $10,000 floor ($5,000 MFS) for high earners. This mainly helps middle-income itemizers in high-tax states like California, New York, and New Jersey.
QBI (Section 199A) Deduction Permanent
Lower taxesOBBBA made the 20% qualified business income deduction permanent.
The Section 199A qualified business income deduction — which lets pass-through business owners deduct up to 20% of qualified business income — was set to expire after 2025 under TCJA. OBBBA made it permanent. Income phaseouts and SSTB limitations continue to apply.
2025 vs 2026 Contribution Limits
Retirement and health savings account limits for the upcoming year.
| Account | 2025 Limit | 2026 Limit |
|---|---|---|
| 401(k) / 403(b) | $23,500 | $24,500 +$1,000 |
| IRA (Traditional & Roth) | $7,000 | $7,500 +$500 |
| HSA (Self-only) | $4,300 | $4,400 +$100 |
| HSA (Family) | $8,550 | $8,750 +$200 |
Your Personal 2026 Tax Impact
Tax Difference
−$279
Less tax in 2026
Deduction Change
+$350
Standard deduction increase
Effective Rate Change
-0.37%
10.60% → 10.23%
What to Do Now
Take advantage of 2026 changes with these planning steps.
Max Out Your 401(k)
The 2026 limit rises to $24,500. Increasing contributions lowers your taxable income.
Review Your Withholding
New brackets mean your W-4 may need updating to avoid over- or under-withholding.
Compare Standard vs Itemized
With a higher standard deduction and raised SALT cap, check whether itemizing still makes sense.
Check Your State Tax Impact
Federal changes interact with your state tax. See how your total burden shifts.