Your salary may be slightly higher in 2026, even if you have not received a New Year’s increase. That’s because last year, to adjust for inflation, the Internal Revenue Service made some major changes to the tax code.
In case you missed it, the changes were announced in October. In particular, the 2026 standard deduction (to be filed in 2027) — which lowers the amount of your income you’re taxed on — will increase. “For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly,” explains the October announcement. “For single taxpayers and married individuals filing separately, the standard deduction will increase to $16,100 for tax year 2026, and for heads of household, the standard deduction will be $24,150.”
Experts say the change will likely lead to Americans saving money on their taxes. “If the standard deduction increases, it means they will have lower taxable income, which means they will pay less taxes,” Caroline Bruckner, director of American University’s Kogod Tax Policy Center, told The Independent.
New income limits
Another big change from the IRS is the income threshold for each of the seven federal income tax brackets, which will also change. The top tax bracket, for those filing individually, is now for incomes above $640,600, which are taxed at a rate of 37%. For married people filing jointly, the same applies to those making more than $768,700. That group is followed by the 35% bracket, which includes incomes of more than $256,225 for individuals and more than $512,450 for married couples.
At the lower end of the spectrum, individuals and married couples earning at least $12,400 and $24,800 respectively will be taxed at a rate of 12%. Individual filers earning $12,400 or less are taxed at a rate of 10%. The same will apply to married couples filing jointly who earned $24,800 or less.
According to the Tax Foundationa non-partisan tax policy nonprofit based in Washington, DC, changing tax bracket thresholds is not uncommon. And it’s important for combating what’s known as bracket creep, which happens when inflation is the root cause of pushing taxpayers into higher tax brackets. That means the amount taxpayers owe could increase without increasing real income.
While the recent changes to 2025 tax brackets may increase your salary, they are actually quite modest in that case compared to recent years. For example, for a single filer, the income threshold for the 10% bracket has increased from $11,000 in 2023 to $11,600 in 2024. For those who are married and filing jointly, the threshold has shifted from $22,000 to $23,200. Also last year, tax brackets changed by about 7% due to inflation.
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