$\text{The}$ $\text{New}$ $\text{2026}$ $\text{Tax}$ $\text{Brackets}$: $\text{Who}$ $\text{Pays}$ $\text{More}$ $\text{or}$ $\text{Less}$
The $\text{IRS}$ has released the $\text{2026}$ federal income tax brackets and standard deduction amounts, adjusted for inflation (Cost-of-Living Adjustments or $\text{COLAs}$). The good news for most Americans is that these adjustments are designed to prevent "**bracket creep**," meaning you won't pay a higher percentage of tax simply because your income kept pace with inflation.
The overall impact for $\text{2026}$ is a **tax reduction for most income levels**, especially due to a temporary tax cut bill that significantly boosted the standard deduction for certain income groups.
$\text{Key}$ $\text{Change}$: $\text{Standard}$ $\text{Deduction}$ $\text{for}$ $\text{Married}$ $\text{Filing}$ $\text{Jointly}$ $\text{($\text{MFJ}$)}$:
$\mathbf{\$32,200}$ $\text{($\text{Projected}$ $\text{2026}$)}$(All taxpayers get to shield more income from tax.)
$\text{2026}$ $\text{Federal}$ $\text{Income}$ $\text{Tax}$ $\text{Brackets}$
The marginal tax rates of $\text{10\%}$, $\text{12\%}$, $\text{22\%}$, $\text{24\%}$, $\text{32\%}$, $\text{35\%}$, and $\text{37\%}$ remain the same, but the income thresholds for each bracket have increased. This means you can earn more money before your next dollar is taxed at a higher rate.
[attachment_0](attachment)| $\text{Rate}$ | $\text{Single}$ $\text{Filers}$ $\text{($\text{Taxable}$ $\text{Income}$ $\text{Over}$)}$ | $\text{Married}$ $\text{Filing}$ $\text{Jointly}$ $\text{($\text{Taxable}$ $\text{Income}$ $\text{Over}$)}$ |
|---|---|---|
| $\mathbf{10\%}$ | $\text{\$0}$ | $\text{\$0}$ |
| $\mathbf{12\%}$ | $\text{\$12,400}$ | $\text{\$24,800}$ |
| $\mathbf{22\%}$ | $\text{\$50,400}$ | $\text{\$100,800}$ |
| $\mathbf{24\%}$ | $\text{\$105,700}$ | $\text{\$211,400}$ |
| $\mathbf{32\%}$ | $\text{\$201,775}$ | $\text{\$403,550}$ |
| $\mathbf{35\%}$ | $\text{\$256,225}$ | $\text{\$512,450}$ |
| $\mathbf{37\%}$ | $\text{\$640,600}$ | $\text{\$768,700}$ |
$\text{The}$ $\text{Impact}$: $\text{Who}$ $\text{Pays}$ $\text{Less}$ $\text{($\text{Or}$ $\text{Why}$ $\text{You}'\text{ll}$ $\text{Save}$)}$
The primary benefit for nearly all taxpayers in $\text{2026}$ comes from two factors: the higher **Standard $\text{Deduction}$** and the effects of a temporary tax cut bill.
$\text{1}$. $\text{Higher}$ $\text{Standard}$ $\text{Deduction}$ $\text{($\text{Less}$ $\text{Taxable}$ $\text{Income}$)}$
The standard deduction is the amount of income you can subtract from your $\text{Adjusted}$ $\text{Gross}$ $\text{Income}$ ($\text{AGI}$) before calculating your tax liability. The increase shields more of your income from taxation, primarily benefiting **middle and lower-to-middle income families** who take the standard deduction.
| $\text{Filing}$ $\text{Status}$ | $\text{2025}$ $\text{Standard}$ $\text{Deduction}$ $\text{($\text{Est}$.)}$ | $\mathbf{2026}$ $\mathbf{Standard}$ $\mathbf{Deduction}$ $\mathbf{($\mathbf{Est}$.)}$ |
|---|---|---|
| $\text{Single}$ | $\text{\$15,750}$ | $\mathbf{\$16,100}$ |
| $\text{Married}$ $\text{Filing}$ $\text{Jointly}$ | $\text{\$31,500}$ | $\mathbf{\$32,200}$ |
| $\text{Head}$ $\text{of}$ $\text{Household}$ | $\text{\$23,700}$ | $\mathbf{\$24,150}$ |
$\text{2}$. $\text{Working}$ $\text{Families}$ $\text{Tax}$ $\text{Cuts}$
Recent legislation, sometimes referred to as the "**One $\text{Big}$ $\text{Beautiful}$ $\text{Bill}$ $\text{Act}$**," provides significant additional relief for working families in $\text{2026}$.
- **Child $\text{Tax}$ $\text{Credit}$ $\text{($\text{CTC}$)}$ $\text{Boost}$:** The $\text{CTC}$ is expanded to $\mathbf{\$2,200}$ per child and is now indexed to inflation, providing a larger direct benefit for families with children.
- **$\text{Tax}$ $\text{Refund}$ $\text{Projections}$:** Analysts project that $\text{2026}$ tax refunds could be the largest ever, with the average taxpayer seeing a significant increase in after-tax income (projected $\sim\mathbf{5.4\%}$ on average).
$\text{What}$ $\text{About}$ $\text{High}$-$\text{Income}$ $\text{Filers}$? $\text{($\text{Who}$ $\text{Pays}$ $\text{More}$)}$
While the overall direction is lower taxes, certain high-income earners may see their taxes increase compared to $\text{2025}$, primarily due to phase-outs and limits on specific deductions:
- **$\text{SALT}$ $\text{Deduction}$ $\text{Cap}$:** The deduction for State and Local Taxes ($\text{SALT}$) is capped at $\mathbf{\$40,400}$ for most high earners in $\text{2026}$, compared to the $\text{\$10,000}$ cap in previous years. While this is an increase for some, very high earners in high-tax states may still face limitations.
- **$\text{AMT}$ $\text{($\text{Alternative}$ $\text{Minimum}$ $\text{Tax}$)}$ $\text{Changes}$:** The $\text{AMT}$ is a separate tax calculation designed to ensure high-income individuals pay a minimum amount of tax. The $\text{2026}$ $\text{AMT}$ exemption amount and phase-out thresholds have been adjusted, which may increase the tax liability for a small number of very high-earning taxpayers.
For the **vast majority of middle and low-income taxpayers**, the $\text{2026}$ changes—specifically the higher standard deduction and the increased $\text{Child}$ $\text{Tax}$ $\text{Credit}$—mean you will be paying less tax compared to previous years, assuming your income growth was modest and did not push you significantly into a higher bracket.
We can help you run a personalized projection based on your estimated $\text{AGI}$ and filing status.
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