IRS Adjusts Tax Rates for 2026
Even if you receive a raise in the upcoming year, your tax rate might stay the same due to the recent tax rates announced by the Internal Revenue Service.
Interestingly, if your income remains unchanged or decreases, you could even see a lower rate.
The IRS usually makes yearly adjustments to your tax obligations to account for inflation. This helps ensure that households with nominal income increases don’t face higher taxes without a real increase in purchasing power.
If someone files a tax return in April 2027, the tax brackets will see a year-over-year increase of about 2.7% to keep up with inflation.
This means that a household earning near the upper limit of a particular tax bracket in 2025, but reporting a slightly higher income in 2026, might not necessarily be pushed into the next bracket, avoiding a tax rate hike.
In fact, some individuals reporting the same income in 2026 as they did in 2025 could end up with reduced taxes. For instance, a single filer with an income of $100,000 in 2026 would owe around $13,170 in federal taxes. That’s a decrease of $279 compared to the previous year, based on calculations from NBC News.
Tom Oseven, director of tax content and government relations at the National Association of Tax Professionals, remarked on this phenomenon, saying, “We call this ‘bracket creep,’ and if adjustments for inflation aren’t made, you end up facing a higher tax rate.”
The IRS has also raised the standard deduction amounts. For those opting not to itemize deductions, the standard deduction will increase by 7.3% for the 2026 tax year compared to 2025. For married couples filing jointly, it will be $32,200; for single taxpayers and married individuals filing separately, it will be $16,100; and for heads of households, it will be $24,150.
This announcement comes despite the fact that a significant portion of IRS employees were furloughed due to a government shutdown.
Additionally, recent government court filings revealed that around 1,500 employees from the Treasury Department were laid off earlier this month, which notably impacted the IRS, especially in terms of human resources and IT support.
