The 2026 tax brackets are based on the United States’ progressive tax system, which means that as your income increases, different portions of it are taxed at progressively higher rates.
Imagine the tax system like a staircase made up of buckets. Each step or “bucket” can hold only so much of your income before it spills into the next one, which is taxed at a higher rate.
Let’s start with a hypothetical illustration of this, and use simplified numbers to make it easy:
| Portion of Taxable Income | Tax Rate |
|---|---|
| First $20,000 | 10% |
| Next $60,000 | 12% |
| Anything above $80,000 | 22% |
If you and your spouse file jointly and your taxable income after deductions is $90,000, here’s how your taxes would be calculated:
- The first $20,000 is taxed at 10% — $2,000 in tax.
- The next $60,000 (from $20,001 to $80,000) is taxed at 12% — $7,200 in tax.
- The final $10,000 (from $80,001 to $90,000) is taxed at 22% — $2,200 in tax.
Add it up, and your total tax bill is $11,400. Notice you’re “in” the 22% tax bracket, but only a small slice of your income is actually taxed at 22%. Most of it is taxed at the lower 10% and 12% rates.
That’s the key: Being in a certain tax bracket doesn’t mean all of your income is taxed at that rate—it just means your last dollars are.
The Good News: Tax Rates Are Staying Low
The big headline from the IRS’s 2026 update is this: tax rates themselves aren’t changing.
The current tax brackets—10%, 12%, 22%, 24%, 32%, 35%, 37%—are sticking around. These rates were originally set to sunset and revert to the higher pre-2018 rates (10%, 15%, 25%, 28%, etc.). But the new tax legislation passed this summer made the lower rates permanent. Of course, “permanent” in Washington really means “until Congress decides to change them.” But for now, that’s a win for taxpayers, as there is no pre-set expiration date on these rates.
How the 2026 Tax Brackets Are Expanding
While the rates aren’t changing, the income thresholds are expanding, meaning you can earn a bit more before bumping into the next bracket. These increases are tied to inflation adjustments, and the IRS just released the updated numbers for 2026.
| Tax Rate | Single/Married Filing Separately | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 | $0 to $17,700 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $17,701 to $67,450 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 | $67,451 to $105,700 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 | $105,701 to $201,775 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 | $201,776 to $256,225 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 | $256,226 to $640,600 |
| 37% | $640,601 or more | $768,701 or more | $640,601 or more |
That’s about a 3.98% expansion on the first two brackets, slightly higher than this year’s inflation rate, and approximately a 2% expansion of the others.
Standard Deduction Is Increasing Too
The standard deduction, the amount every taxpayer gets to subtract from their income before paying taxes, is also rising in 2026.
| Single | Married Filing Jointly | Head of Household | Married Filing Separately | Dependents | |
|---|---|---|---|---|---|
| 2026 | $16,100 | $32,200 | $24,150 | $16,100 | $1,350 |
| 2025 | $15,750 | $31,500 | $23,625 | $15,750 | $1,350 |
This large deduction, which was originally set to expire in 2026, has now been made “permanent” under the new tax law—another win for taxpayers.
Here’s what it means in practice:
A married couple filing jointly in 2026 could earn roughly $130,000 of total income and still be in the 12% tax bracket after subtracting the $32,200 standard deduction.
That’s a significant advantage. It keeps a large portion of middle-income in lower brackets and allows for greater tax efficiency when planning things like Roth conversions or charitable giving.
What This Means for Your Tax Planning
While these updates might not sound headline-grabbing, they do create meaningful opportunities for strategic tax planning. Now that we know both the 2025 and 2026 tax brackets and deductions, you can begin adjusting your strategy before the end of this year.
Consider:
- Should you use today’s low tax rates to complete a Roth conversion before income or rates rise?
- Should you shift future contributions from pre-tax to Roth accounts?
- Are you prioritizing your HSA contributions effectively before funding other retirement accounts?
Tax planning is most effective when it’s proactive, not reactive. With this new clarity on the 2026 tax brackets, now is the perfect time to sit down with your CERTIFIED FINANCIAL PLANNER™ to review your plan.
The IRS didn’t make any drastic changes, but these expansions are still meaningful. Larger brackets and higher deductions mean you can earn more before hitting higher tax rates, which gives you more flexibility to plan intelligently.
Take the time this fall to meet with your financial planner and ensure your tax strategy is aligned with these updated 2026 tax brackets. Because when it comes to taxes, a little clarity and a well-timed strategy can make a big difference in your long-term financial success.
Jared Moxness is a CERTIFIED FINANCIAL PLANNER™ at Korhorn Financial Group. He also holds his Certified Public Accountant (CPA) and Certified Exit Planning Advisor (CEPA) designations.
