IRS announces 2026 income tax brackets: Standard deductions, slabs, and other details

Here's everything you need to know about standard deductions for tax year 2026 for returns filed in 2027.

The Internal Revenue Service (IRS) on Thursday, October 9, announced new federal income tax brackets as well as standard deductions for 2026. As per the latest announcement, the income brackets that are used to find out how much taxes Americans are required to pay every year are moving up in 2026.

Check out the standard deductions for tax year 2026 for returns filed in 2027.(AFP)

The newly announced adjustments are for returns that will be filed in early 2027.

Standard deduction goes up in 2026

Standard deduction, which is claimed by most of the taxpayers in the US, is a fixed amount that is deducted to reduce the taxable income. This helps in lowering an individual's federal tax bill.

Compared to single taxpayers, married couples have the opportunity to claim a higher standard deduction when they file jointly.

As per the latest IRS announcement, the standard deduction will be 2.2% more in 2026 for each filing status compared to the previous year, according to NewsNation.

Single and married couples filing separately: The standard deduction has been increased to $16,100 from $15,750 in 2025.

Married filing jointly or surviving spouses: They will now have a standard deduction of $32,200, up from $31,500 in 2025.

Heads of households: The amount has increased from $23,625 in 2025 to $24,150 in 2026.

New federal income tax brackets for 2026

In Thursday's announcement, the IRS has increased the income thresholds for every bracket. This applies to tax year 2026 for returns that will be filed in 2027.

Besides this, the agency has even significantly boosted figures for long-term capital gains brackets, among others.

For tax year 2026, the top tax rate remains at 37% for individual taxpayers having income more than $640,600 or $768,700 for married couples filing jointly.

The lowest rate has been set at 10%. This is for single individuals having a taxable income of $12,400 or less. For married couples filing jointly, it is set at $24,800.

The federal income tax brackets highlight how much an individual owes on every part of the "taxable income". Americans can calculate by removing the greater of the standard or itemized deductions from their overall adjusted gross income, according to CNBC.

This comes after the IRS announced its decision to furlough nearly half its workforce in the wake of the ongoing federal government shutdown.

FAQs

What is a standard deduction?

This is a fixed, non-taxed income amount, which people can reduce from their taxable income.

When will the government shutdown end?

The federal government shutdown has entered Day 9 since it started on October 1. As of now, it remains to be seen when the deadlock ends.

Why is the US witnessing a government shutdown?

It came into effect after Donald Trump and congressional Republicans failed to reach an agreement with Democrats over funding bills.