2026 tax brackets vs. 2025: Here’s what’s changed, other things to know
Ask The Expert: Tips for Filing Taxes
The tax filing deadline is just a couple days away. LiveNOW from FOX's Andrew Craft spoke with Marketwatch's Andrew Keshner for tips if you're filing last minute.
WASHINGTON - Your paycheck could be a little larger in 2026.
In October, the Internal Revenue Service (IRS) released updated federal income tax bracket adjustments for the 2026 tax year tied to President Donald Trump’s "big beautiful bill."
2026 tax brackets
By the numbers:
Because of inflation adjustments, income thresholds for the two lowest brackets rose by about 4%, while higher brackets increased by roughly 2.3% compared with 2025 levels. The agency also announced higher standard deductions and other provisions.
Photo illustration of federal tax forms distributed at the offices of the Internal Revenue Service. (Credit: Scott Olson/Getty Images)
For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,100 for tax year 2026, and for heads of households, the standard deduction will be $24,150.
2025 tax brackets
By the numbers:
For returns filed over the next few months, the IRS increased its tax brackets by about 2.75% from the previous year for both individual and married filers across various income levels in tax year 2025:
How do tax brackets work?
Big picture view:
According to Fidelity, the U.S. has a progressive tax system at the federal level with seven tax brackets.
As you earn more money, the additional income jumps to a higher bracket with a higher tax rate. Over a certain amount, your income is taxed no further.
Big Beautiful Bill would eliminate taxes on tips
Republican leaders in the House are sprinting toward a Wednesday vote on President Donald Trump?s tax and spending cuts package, determined to seize momentum from a hard-fought vote in the Senate while essentially daring members to defy their party?s leader and vote against it. It?s a risky gambit designed to meet Trump?s demand for a July 4 finish. LiveNOW's Andy Mac discusses what does the Big Beautiful Bill mean for US citizens with MarketWatch Andrew Keshner.
The IRS adjusts federal income tax brackets annually to account for inflation, and the new brackets can help you estimate your tax obligation based on your income and filing status for the year.
The IRS uses different federal income tax brackets and ranges depending on filing status:
- Single filers
- Married filing jointly
- Married filing separately
- Heads of households who are unmarried but taking care of a qualifying child or dependent
No taxes on tips, overtime
Dig deeper:
The Big Beautiful Bill also created other deductions, including a temporary deduction for tips up to $25,000 for tax years 2025 through 2028.
The deduction phases out for taxpayers with a modified adjusted gross income over $150,000, and tips must be earned in an occupation on Treasury’s list of qualified occupations.
Workers can deduct up to $12,500 in overtime (or up to $25,000 in a joint return). Like the tip measure, the amount workers can deduct is reduced if they make more than $150,000. And they must include a Social Security number when they file.
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In addition, older adults (65 or older as of Dec. 31, 2025) who earn no more than $75,000 a year also get an additional $6,000 deduction, Trump’s nod to his pledge to end taxes on Social Security benefits.
Effective for 2025 through 2028, individuals may also deduct interest paid on a loan used to purchase a qualified vehicle.
"If you bought a car and it was assembled in the United States and you borrowed money, (you could get) up to $10,000 in deductible loan interest," Steber said.
The child tax credit has also been boosted from $2,000 to $2,200.
IRS Direct File unavailable
Big picture view:
The Trump administration has decided not to offer Direct File, the IRS' electronic tax filing system for free next year, and the program’s future is unclear. This free, electronic way to file had been available in a handful of states.
READ MORE: 2026 tax filing season changes: IRS Direct File unavailable
When can you file taxes in 2026?
Timeline:
The IRS has not yet announced when it will begin accepting tax returns, though the agency typically begins processing new returns the last week of January. The last day to file taxes without requesting an extension is Wednesday, April 15, 2026.
The Source: This story was reported from Los Angeles. Previous FOX Local reporting contributed.