Nov 23, 2025
Even a government shutdown — and the furlough of 34,000 employees at the Internal Revenue Service — doesn’t change the need to file your 2026 taxes.
The shutdown was big news. But right after the IRS announced employee furloughs (1), it released important news without much fanfare: updated tax brackets affecting every taxpayer in the U.S.
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Each year, the Internal Revenue Service (IRS) adjusts the nation’s tax brackets upward to account for the impact of inflation using the Consumer Price Index (CPI) as a guide.
This is especially helpful if your wages are just keeping up with inflation, but you’re at risk of being pushed into a higher wage bracket as a result of a pay increase. It offers all taxpayers some relief from the increasing cost of living.
Updated tax brackets are generally good news. So why weren’t they big news?
Perhaps because the bump in tax brackets isn’t big, either.
Here’s more on the tax bracket updates and what it could mean for you.
Not-so-big tax bracket bumps
Bloomberg Tax estimates the IRS has bumped this year’s tax brackets up by about 2.7% over 2024 (2).
As CBS reports, that contrasts to the IRS bumping tax brackets by a whopping 7% in 2023 and another 5.4% in 2024 to address ongoing inflation following the pandemic (3). So this year’s bump is relatively modest.
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For individual filers, these are the new income tax brackets:
- 10% tax bracket: $0—$12,400
- 12% tax bracket: $12,401—$50,400
- 22% tax bracket: $50,401—$105,700
- 24% tax bracket: $105,701—$201,775
- 32% tax bracket: $201,776—$256,225
- 35% tax bracket: $256,225—$640,600
- 37% tax bracket: $640,601 and up
The upper end of the lowest tax bracket (10%) has been raised from $11,925 in 2025 to $12,400 in 2026. That’s a 3.9% increase.
Meanwhile, the floor for the top marginal tax rate (37%) has been raised from $626,351 this year to $640,601 for individual tax filers next year. That’s a smaller bump of 2.3%.
These are the new income thresholds for married couples who file jointly:
- 10% tax bracket: $0—$24,800 (up from $23,850 in 2025, a 3.9% bump)
- 12% tax bracket: $24,801—$100,800
- 22% tax bracket: $100,801—$211,100
- 24% tax bracket: $211,401—$403,550
- 32% tax bracket: $403,551—$512,450
- 35% tax bracket: $512,451—$768,700
- 37% tax bracket: $768,701 and up (up from $751,601, a 2.3% bump)
Depending on your tax filing status and expected income, these new brackets should give you an idea of how much you might owe in taxes next year.
However, income thresholds are only one of the many elements that ultimately determine how much you’ll have to pay to the government.
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Compared with all the other major changes to the tax code, including tax deductions, many taxpayers could save thousands in tax liabilities next year, resulting in a lower tax bill overall.
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Increased tax credits and deductions
The IRS hasn’t just updated income thresholds to reflect inflation. It’s raising deductions across the board, including:
- $16,100 for singles and married individuals filing separately
- $24,150 for heads of household, and
- $32,200 for married couples who file jointly.
The earned income tax credit is getting raised from $8,046 for the current tax year to $8,231 for families with at least three children in 2026.
Older Americans could enjoy a bigger break in 2026 thanks to the new seniors’ tax deduction of $6,000 — one of the tax changes outlined in Trump’s One Big Beautiful Bill Act.
While these changes across relief across the spectrum, the 2% to 4% bump in tax brackets may not be adequate for those who’ve experienced higher rates of wage growth or those experiencing higher rates of inflation in their city or state.
Nevertheless, higher thresholds and broader deductions should give you and your family more wriggle room to manage taxes next year.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Politico (1); Bloomberg (2); CBS News (3)
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
