IRS Announces Changes For Tax Year 2026: What You Need To Know

Does the government change tax law just to keep things interesting? Or because it’s fun? Uh—no. We’re pretty sure nobody at the IRS knows what a sense of humor is.

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Making annual changes to income tax law is never done for kicks and giggles. Actually, the IRS adjusts the tax brackets every year to account for inflation so you don’t find yourself paying more taxes than you should—which would suck.

The IRS has announced the 2026 tax changes (adjustments for the taxes you’ll file in 2027), and there’s good news: They’re relatively minor.¹ Thanks to the One Big Beautiful Bill Act (OBBBA), most of the tax cuts that were set to expire at the end of 2025 have been made permanent. In some cases, those tax breaks have even been expanded!

Let’s take a closer look at what’s changing (and what stays the same) when it comes to your taxes in 2026.

Tax Brackets Adjust Upward, Tax Rates Unchanged for 2026

The way the income tax system works in the United States is that the more you earn, the more you pay. How much you pay depends on what tax bracket you fall into.

Tax brackets are ranges of income that are taxed at specific tax rates. Your tax bracket is determined by your taxable income and your filing status. And each year, the IRS adjusts the tax brackets for inflation—which is a good thing since it means a larger portion of your income will be taxed at a lower rate than the year before.

For 2026, the size of the adjustments looks different for each tax bracket. For example, the lowest bracket for single filers, which is 10%, now applies to the first $12,400 of income—which is $475 more than in 2025. And the highest bracket for those who are married filing jointly, which is the 37% bracket, now applies to income greater than $768,700—that’s a $17,100 bump from last year.²

The bottom line? More of your money is getting taxed at a lower rate, which is good!

While the IRS made some minor changes to the income range inside each tax bracket, the tax rates themselves haven’t changed. Here’s what those 2026 tax brackets and tax rates look like:

Tax Rate	Single Filer	Married, Filing Jointly	Married, Filing Separately	Head of Household
10%	0–$12,400	0–$24,800	0–$12,400	0–$17,700
12%	$12,400–$50,400	$24,800–$100,800	$12,400–$50,400	$17,700–$67,450
22%	$50,400–$105,700	$100,800–$211,400	$50,400–$105,700	$67,450 –$105,700
24%	$105,700–$201,775	$211,400–$403,550	$105,700–$201,775	$105,700–$201,750
32%	$201,775–$256,225	$403,550–$512,450	$201,775–$256,225	$201,750–$256,200
35%	$256,225–$640,600	$512,450–$768,700	$256,225–$384,350	$256,200–$640,600
37%	Over $640,600	Over $768,700	Over $384,350	Over $640,6003

Here’s an example. Let’s say you’re single and your taxable income is $40,000 in 2025. According to the numbers above, that means you’ll be in the 12% tax bracket.  

This means you’ll pay 10% on the first $12,400 of your income, then 12% on the next chunk ($12,400–40,000). When we add it all up, your tax bill (rounded to the next dollar) comes to $4,552.

It may sound like a lot, but don’t worry—you can lower your tax burden through deductions and credits.

Standard Deductions Increased for 2026

Now let’s talk about the standard deduction. Depending on your filing status, it reduces how much of your income is taxed and (bonus!) lowers your tax bill.

So, what does your standard deduction look like? Here are the standard deduction amounts available for tax year 2026:

Filing Status	Standard Deduction Amount
Single	$16,100
Married Filing Jointly	$32,200
Married Filing Separately	$16,100
Head of Household	$24,1504

For most taxpayers, it makes sense to take the standard deduction and call it a day (but it might make sense to itemize your deductions if you had a lot of deductible expenses last year).

2026 Contribution Limits

If you’re saving for retirement, you’re ahead of the game—half of our fellow Americans (50%) aren’t investing anything at all for retirement.⁵ Yikes.

Let’s take a look at how much you can contribute to retirement plans, health savings accounts and educational savings accounts this year.

Employer-Sponsored Retirement Plans (401(k), 403(b), 457 plan, TSP)

Here’s some good news for savers. For 2026, the IRS increased the contribution limits for employer-sponsored retirement savings plans to $24,500.⁶

That means you can invest even more through workplace retirement plans like:

• 401(k)s
• 403(b)s
• 457 plans
• Thrift Savings Plans (TSPs)

If you’re 50 years old or over, you can add another $8,000 as a catch-up contribution (for a grand total of $32,500.) But if you’re age 60–63, you have an additional catch-up contribution limit of $11,250, which means you can invest a total of $35,750 in your 401(k).

For 2026, the limit on combined employee and employer contributions is $72,000.⁷

IRAs (Individual Retirement Accounts)

What if you want to invest outside the workplace? If you’re saving for retirement with an IRA (traditional or Roth), the contribution limit for those bumps up to $7,500 for 2026. If you’re over 50, you can take advantage of an extra $1,100 catch-up contribution.⁸

SEP IRAs and SIMPLE IRAs

Don’t worry, small-business owners—we haven’t forgotten about y’all! SEP and SIMPLE IRAs are both retirement plans for small businesses, but the main difference is who contributes. SEP-IRAs are funded only by the employer, while SIMPLE IRAs allow both employer and employee contributions.

• SEP-IRAs: For 2026, employers can contribute up to $72,000 or 25% of an employee’s compensation (whichever amount is less) to a SEP IRA.⁹

• SIMPLE IRAs: With a SIMPLE IRA, employees can contribute up to $17,000 in 2026. Anyone age 50 or older with an account can contribute an additional $4,000 as a catch-up contribution (and those age 60–63 can put in an extra $1,250 on top of that).¹⁰

Health and Education Accounts

There’s no getting around it—medical expenses and college tuition aren’t cheap. If you’re planning to save up for medical expenses or for your kids’ college funds, here’s what you need to know!

• Health Savings Accounts (HSAs): If you’re eligible to contribute to an HSA, individuals can contribute up to $4,400 to their account. The family contribution limit is $8,750.¹¹
• Flexible Spending Accounts (FSAs): For 2026, the health care FSA contribution limit is $3,400. Meanwhile, the dependent care FSA limit is $7,500 per household (or $3,750 for married couples filing separately).¹²
• 529 plans: While there’s no federal annual contribution limit for 529 plans, your contributions to these college savings accounts are still subject to the annual federal gift tax exclusion of $19,000 for individuals (or $38,000 per couple).¹³ Any contributions you make above the gift tax exclusion will count against your lifetime gift tax exemption (more on that below).
• Coverdell Education Savings Accounts (ESAs): Nothing changes here—the annual contribution limit for an ESA is $2,000 for each beneficiary, regardless of how many accounts are opened for your child.¹⁴

2025–2026 Contribution Limits

Employer-Sponsored Plans (401(k), 403(b), 457 Plan, TSP)
	2025	2026
Employee Contributions	$23,500	$24,500
Catch-Up Contributions (Age 50 and Older)	$7,500	$8,000
Catch-Up Contributions (Ages 60–63)	$11,250	$11,25015
Total Contributions (Employee and Employer)	$70,000	$72,00016
Individual Retirement Account (IRA)
	2025	2026
Traditional/Roth Contributions	$7,000	$7,500
Catch-Up Contributions (Age 50 and Older)	$1,000	$1,10017
Self-Employed Pension (SEP-IRA)
	2025	2026
Employer Contributions (or 25% of Employee’s Compensation, Maximum)	$70,000	$72,00018
SIMPLE IRA
	2025	2026
Regular Contributions	$16,500	$17,000
Catch-Up Contributions (Age 50 and Older)	$3,500	$4,000
Catch-Up Contributions (Ages 60–63)	$5,250	$5,25019
Health Savings Account (HSA)
	2025	2026
Individual	$4,300	$4,400
Family	$8,550	$8,750
Catch-Up Contributions (Age 55 and Older)	$1,00020	$1,00021
Flexible Spending Account (FSA)
	2025	2026
Health Care FSA Contributions	$3,300	$3,400
Dependent Care FSA Contributions	$5,000 per household, or $2,500 for married couples filing separately22	$7,500 per household, or $3,750 for married couples filing separately23
529 Plan (Education Account)
	2025	2026
Annual Gift Exclusion	$19,000	$19,00024
Coverdell Education Savings Account (ESA)
	2025	2026
Regular Contributions	$2,000	$2,00025

2026 Estate Tax Exclusions

Now, let’s chat a little about estate taxes. Yep, even in death, the tax man makes sure he gets his fair share from whatever you leave behind—that is, unless its value is less than the “basic exclusion amount.”

Allow us to translate that into English: For 2026, if your estate’s value is less than $15 million (up from $13.99 million in 2025), then your estate won’t get taxed before it’s passed on to your heirs.²⁶

 

2026 Gift Tax Exclusions

What if you want to give money away while you’re still among the living? For tax year 2026, you can gift up to $19,000 per recipient in cash or property without paying the gift tax (the same limit as in 2025).²⁷ Don’t miss that: Yes, it’s an annual limit, but the cap doesn’t apply to the giver—it applies to whoever receives the gift.

For example: If you had three kiddos and wanted to max out your annual limit, you could give up to $19,000 to each child without paying taxes on it. Of course, if you give more than $19,000 to someone this year, the IRS has a form for that (big surprise . . . said no one ever).²⁸

The same “exclusion amount” from the estate tax applies to gift taxes, which means you can apply any excess gift amounts to your lifetime exemption and avoid paying any gift tax on it.²⁹

2026 Earned Income Tax Credit

The earned income tax credit, or EITC, is designed to help lower-income families—especially those with children. It’s a refundable tax credit, which means if the credit is larger than your tax bill, you’ll get the balance as part of your tax refund.

To claim this credit, you don’t have to have kids, but you do need to meet certain eligibility requirements for things like your income, filing status, residency and age. You’ll also need to fill out a Schedule EIC and send it to the IRS along with your tax return if you do have children.³⁰

The maximum amount of the EITC for tax year 2026 is $8,231, but exactly how much it is in your case depends on those eligibility criteria we just mentioned—so double-check with a tax pro or your online tax software to find out how much of the credit you’re eligible to receive.³¹

Child Tax Credit

The OBBBA raised the child tax credit (CTC) from $2,000 to $2,200 per qualifying child, and that will still be the case in 2026.³²

But there are a few details you should know. The CTC is only partially refundable (up to $1,700 per child)—so that’s the most you’ll get back as a refund for each kid.³³

The good news is, there’s no limit to how many children qualify for the credit. So if you have nine kiddos running around (for example), you’ll get a pretty hefty check. Consider it a thank-you for helping raise the entire next generation of Americans all by yourself.

Also, this credit begins to phase out once your income is greater than $200,000 if you’re filing single and $400,000 if you’re married filing jointly.³⁴

What’s Not Changing?

In the same way that the printer’s always out of ink and your favorite mug is always in the dishwasher, some things never change (that includes the tax code). Let’s look at what’s not changing for tax year 2026.

Personal Exemptions

Once upon a time, taxpayers were allowed to reduce their taxable income by deducting a specific amount of money for themselves, their spouse, and each dependent they claimed on their tax return. These specific amounts were called personal exemptions.

When the Tax Cuts and Jobs Act (TCJA) became law in 2017, the government removed personal exemptions altogether and doubled the standard deduction instead. For many taxpayers, these changes made life simpler while also lowering their tax bill (miracles happen). Now with the One Big Beautiful Bill, the personal exemption is gone for good.

Itemized Deductions

Thanks to the OBBBA, there will be no limitation on itemized deductions moving forward. That tax provision—introduced by the TCJA—was made permanent by the new law. But the OBBBA does limit the tax benefit from itemized deductions for taxpayers in the highest tax bracket (37%).³⁵

Lifetime Learning Credits

The lifetime learning credit exists to help lower-income earners more easily afford an education after high school. The credit begins to phase out for taxpayers making between $80,000 and $90,000 ($160,000 and $180,000 for joint returns).³⁶

However, this credit hasn’t been adjusted for inflation since 2020. You may want to look into the American Opportunity Tax Credit, which not only kicks in a little more money but also is partially refundable.³⁷

2026 and 2027 Tax Season Dates

Tax Day is always April 15 unless it falls on a weekend or holiday, so set a reminder for Wednesday, April 15, 2026, as the deadline for filing your tax return for the 2025 tax year (and it’s totally okay to file early). Looking way ahead, your taxes for tax year 2026 will be due on Thursday, April 15, 2027.

If you’re not ready to file by then, you can file IRS Form 4868 (also known as an extension), which will give you until October 15 to get your paperwork together.³⁸ Be aware: While that gives you more time to file, whatever you owe is still due on Tax Day—and if you don’t pay it, the IRS will charge you penalties and interest (their rates hit hard).

Also, if you’re a gig worker, independent contractor or self-employed, you have to make quarterly estimated payments or the government will hit you with penalties.

But no matter what happens between now and then, a little help goes a long way . . .

Get Ready for Tax Day

There are a couple of ways you can stay ready—no matter how these tax changes impact your financial situation.

One is to find a tax pro, buy them coffee and a pastry (or maybe book a legit appointment), and chat about your options—especially if these tax changes affect you in a major way.

If you’d rather do it yourself, you can use your favorite online tax software (like Ramsey SmartTax) to see how your tax bill will be impacted. Plus, you’ll get a good idea about any adjustments you need to make.

Whatever you decide as you’re making your plans for Tax Day, leave a little extra room for Uncle Sam to pull himself together—he’s got a lot going on at the moment. And remember, when we’re talking about doing your taxes, life’s a lot easier when you’re prepared.