The US Bureau of Labor Statistics has reported that the Consumer Price Index (CPI) increased by 0.4% in August, seasonally adjusted. Over the year, the unadjusted index has risen 2.9%. This suggests that inflation is relatively stable, which is something to consider when filing your taxes in 2026.
Bloomberg Tax & Accounting has projected the US tax rates for 2026, noting a slight uptick compared to 2025. This increase affects deductions and adjusts tax brackets and other critical thresholds upward. These changes stem from the one big beautiful bill law (OBBBA) enacted in July, which could mean that tax returns in 2026 may look a bit different.
Curious about how this translates into actual figures? Well, starting January 1, 2026, there are expectations around tax rates and numbers for that year. However, you won’t find the 2025 rates here; you can check those elsewhere.
Tax Projections for 2026
Here’s what the tax rates could look like for 2026.
Just a heads-up: Your marital status by the end of the tax year (December 31) will decide how you file your taxes. If you’re married on that date, that’s how it will be, simple as that.
Single Taxpayer Tax Brackets
Married Taxpayer Tax Brackets (Joint Filing)
Married Taxpayer Tax Brackets (Separate Filing)
Head of Household Tax Projections
Trusts and Real Estate Tax Projections
Marginal Tax Rate
Your marginal tax rate is crucial as it indicates how much tax you’ll pay on your next income. The top income tax rate for 2026 is anticipated to be 37%, and a 3.8% net investment income tax may apply to individuals with high incomes.
Capital Gains
For those selling assets, if you hold them for less than a year, those gains are considered short-term and taxed at the regular income rate. For assets held longer than a year, they’re long-term and may be taxed up to 20%. There are exceptions, especially for art and collectibles.
The capital gains rate should remain unchanged in 2026, but bracket thresholds will shift. Most taxpayers will see a maximum rate of 15%, while the 20% rate applies to those with incomes crossing the thresholds associated with the highest tax rate.
Personal Exemption Amount
Due to the Tax Cuts and Jobs Act (TCJA), personal exemptions are eliminated until 2025. Previously, individuals could claim exemptions to lower their taxable income.
Standard Deduction Amount
The standard deduction nearly doubled under the TCJA, but thanks to OBBBA, this increase now becomes permanent.
Looking forward to 2026, the anticipated standard deduction amounts will look like this:
Additional Deductions for Seniors
Seniors can expect a new temporary deduction of $6,000 in 2026, which will phase out based on income levels, particularly for those whose income exceeds certain thresholds.
Gross Income Limits for Eligible Relatives
The estimated income limit for qualifying relatives will rise to around $5,250, depending on inflation adjustments.
Children’s Tax
In 2026, children will owe taxes on unearned income surpassing $1,350, but you might opt to report that income on your tax return instead of having them file separately.
Child Tax Credit
Anticipated for 2026, the child tax credit could reach $2,200, with a refundable amount estimated at $1,700.
Student Loan Interest
The deduction for student loan interest will start phasing out for those with adjusted gross incomes of $85,000, with complete elimination at $100,000, remaining unchanged from 2025.
Alternate Minimum Tax (AMT)
The AMT exemption rates are also expected to adjust for inflation in 2026.
Transportation Benefits
Eligible limits for transit and parking benefits in 2026 are set to rise to $340 per month.
Educational Expenses for Teachers
Educators can expect a deduction of around $350 for classroom expenses in 2026.
Health Savings Account (HSA)
The projected annual contribution limit for HSAs is anticipated to be $4,400 for individual coverage and $8,750 for families.
Medical Savings Account (MSA)
For 2026, MSAs will have an adjusted definition, with out-of-pocket costs expected to have certain limits.
Foreign Income Exclusion
The foreign income exclusion is forecasted at $132,900 in 2026, although these exclusions can’t be claimed simultaneously with foreign tax credits.
Section 199a Deduction
This deduction benefits owners of pass-through businesses and, under the TCJA, has become permanent.
Retirement Account Contributions
Contributions to traditional and Roth IRAs are expected to be capped at $7,500, with different limits for those over 50.
Qualified Charitable Distribution (QCD)
For 2026, QCD amounts projected to be excluded from taxable income will be about $111,000, allowing for direct transfers from IRAs to charities.
Roth IRAs
Roth IRA contributions will have phased limits, adjusted for income levels, as predicted for 2026.
Domestic Abuse Distribution
A limit of $1,500 or 50% of the present value of a retirement plan may be available to domestic violence victims.
Federal Property Tax Exclusion
The exclusion for deceased defendants will be $15,000,000 per person or $30,000,000 for couples in 2026.
Gift Tax Exclusion
The federal gift tax exclusion remains unchanged, allowing for $19,000 per person in tax-free gifts.
Final Thoughts
Keep in mind, these are merely forecasts. The IRS will provide the official tax figures for 2026, likely around October. Still, they can give a helpful starting point for tax planning.
Full report available here.
