The tax landscape is shifting, and it's time to take note! The IRS has just released the 2026 tax bracket adjustments, and it's a mixed bag of savings and changes.
Art, an esteemed reporter at Deseret News, brings us the scoop on these updates. Here's the lowdown:
Key Adjustments for 2026:
- The IRS has published tax brackets adjusted for inflation, a routine annual process.
- This year's adjustments reflect a 2.7% inflation level, slightly lower than the current rate, which is good news for taxpayers.
- The budget bill passed earlier this year includes a welcome surprise: larger personal deductions for taxpayers.
Inflation's Silver Lining:
Persistent inflation has been a burden, increasing the cost of living. But there's a twist! The IRS's annual adjustments, based on inflation, might just save you some money. The newly published tax brackets for 2026 could mean a few extra dollars in your pocket, depending on your income.
2026 Brackets:
Here's a breakdown of the 2026 tax brackets, courtesy of Fidelity Investments:
| Tax Rate | Single Filers | Married Filing Jointly | Married Filing Separately | Head of Household |
| --- | --- | --- | --- | --- |
| 10% | $12,400 or less | $24,800 or less | $12,400 or less | $17,700 or less |
| 12% | $12,401 - $50,400 | $24,801 - $100,800 | $12,401 - $50,400 | $17,701 - $67,450 |
| 22% | $50,401 - $105,700 | $100,801 - $211,400 | $50,401 - $105,700 | $67,451 - $105,700 |
| 24% | $105,701 - $201,775 | $211,401 - $403,550 | $105,701 - $201,775 | $105,701 - $201,750 |
| 32% | $201,776 - $256,225 | $403,551 - $512,450 | $201,776 - $256,225 | $201,751 - $256,200 |
| 35% | $256,226 - $640,600 | $512,451 - $768,700 | $256,225 - $384,350 | $256,201 - $640,600 |
| 37% | $640,600 or more | $768,701 or more | $384,351 or more | $640,601 or more |
2025 Changes:
But wait, there's more! For the 2025 tax year, Congress approved changes that increased standard deductions. Single filers get a boost to $15,750, while married couples filing jointly will enjoy a $31,500 deduction. Heads of households will see an increase to $23,625.
Impact on Tax Liability:
The effect of these changes on your tax bill depends on various factors, including family size and income. But the general consensus is that many taxpayers will experience some relief due to these adjustments. As Tom O'Saben from the National Association of Tax Professionals explains, inflation's bite will be a little softer.
Understanding Effective Tax Rates:
The IRS uses a progressive tax system, meaning higher income levels are taxed at higher rates. Your 'marginal rate' is the highest rate that applies to your income. But what you actually pay is your 'effective tax rate,' which is often lower than your top rate.
IRS Facts and Figures:
- In FY 2024, the IRS collected a staggering $5.1 trillion in gross taxes and issued almost $490.6 billion in refunds.
- Nearly 62.2 million taxpayers received assistance by contacting the IRS.
- The IRS website had approximately 690 million visits, with 454 million files downloaded.
- Over $29 billion in additional tax was recommended after the IRS closed 505,514 tax return audits.
And here's the part that might spark some debate: Are these adjustments fair across all income levels? Do they truly provide relief to those who need it most? Share your thoughts in the comments below!
