Brackets and the standard deduction moved up
Inflation indexing pushed every bracket threshold higher for 2026. A single filer's 12% bracket now begins at $12,400 and the 22% bracket at $50,400; the 24% bracket runs from $105,700 and the 32% from $201,775. On a joint return the same rates begin at $24,800, $100,800, $211,400 and $403,550. The top rate of 37% starts at $640,600 for singles and $768,700 for joint filers. The rates themselves did not change, and the 2025 law made them permanent, so the 2026 return is the first filed without a scheduled expiry hanging over the table.
The standard deduction is $16,100 for single filers, $32,200 on a joint return and $24,150 for a head of household, with an additional $2,050 for an unmarried filer who is 65 or older or blind ($1,650 for each married filer or surviving spouse who is). Every figure comes from Revenue Procedure 2025-32 and is the one our bracket guide and calculators use.
Charitable giving has two new rules
Two provisions of the 2025 law take effect for the first time on 2026 returns. Taxpayers who take the standard deduction may deduct up to $1,000 of cash gifts to charity ($2,000 on a joint return) on top of it (gifts to donor-advised funds and supporting organizations do not count), the first non-itemizer charitable deduction since 2021. Taxpayers who itemize, meanwhile, may now deduct charitable gifts only to the extent they exceed 0.5% of adjusted gross income: on $150,000 of income the first $750 of giving no longer counts. The standard vs itemized calculator applies both.
The SALT cap rose again
The cap on deducting state and local taxes, $40,000 for 2025, is $40,400 for 2026. It rises 1% a year through 2029 and returns to $10,000 in 2030. The phase-down for high earners moves with it: above $505,000 of modified adjusted gross income the cap shrinks by 30 cents per dollar, never below $10,000. Married filing separately gets half of each figure. Homeowners in high-tax states who stopped itemizing in 2018 should run the numbers again; the SALT calculator does it in a minute.
The temporary deductions, year two
The deductions the 2025 law created for 2025 through 2028 all apply again: up to $25,000 of reported tips, up to $12,500 ($25,000 joint) of the half-time overtime premium, the $6,000 deduction for each filer aged 65 or older, and up to $10,000 of interest on a loan for a new, U.S.-assembled personal vehicle. Each phases out above an income threshold: $150,000 ($300,000 joint) for tips and overtime, $75,000 ($150,000 joint) for the senior deduction and $100,000 ($200,000 joint) for car-loan interest. Each is claimed on Schedule 1-A whether or not you itemize. A married filer must file jointly to claim the tip, overtime or senior deduction. The overtime, tips and Social Security calculators show what they are worth at your income. Employers were asked to report qualified tips and overtime separately on 2026 Forms W-2, so the figures should be easier to find than they were for 2025.
Credits and family figures
The Child Tax Credit is $2,200 per qualifying child under 17, of which up to $1,700 is refundable, phasing out above $200,000 of income ($400,000 joint); the credit for other dependents stays at $500. The Earned Income Tax Credit tops out at $8,231 for a family with three or more children, and investment income above $12,200 disqualifies a filer. Since 2025 the Child Tax Credit also requires you, or your spouse on a joint return, to have a Social Security number valid for employment, as each qualifying child must.
Retirement and payroll limits
The 401(k) elective deferral limit is $24,500 for 2026, with an $8,000 catch-up at 50 and a larger $11,250 catch-up at ages 60 to 63. The IRA limit is $7,500, plus a $1,100 catch-up. The Social Security wage base (the earnings on which the 6.2% tax stops) is $184,500. Long-term capital gains are taxed at 0% up to $49,450 of taxable income for singles ($98,900 joint) and at 20% above $545,500 ($613,700 joint). Under 59½, a retirement withdrawal still carries the 10% additional tax; at 73 (75 if born in 1960 or later) required minimum distributions begin. See the RMD calculator.
Reporting thresholds
Gambling and slot-machine winnings are reported on Form W-2G at a higher threshold from 2026 ( $2,000 for slots, bingo and keno, indexed for inflation) while the 24% withholding rule above $5,000 is unchanged. Digital-asset brokers began issuing Form 1099-DA for 2025 sales, showing proceeds only. For 2026 sales they must also report cost basis for covered assets; the basis may still be missing for assets moved between platforms.
What did not change
The seven rates, the rule that only income inside each bracket is taxed at that bracket's rate, the 7.5%-of-AGI floor on medical deductions, the $3,000 capital-loss limit against ordinary income, the 3.8% net investment income tax thresholds ($200,000 / $250,000, never indexed) and the 0.9% additional Medicare tax thresholds are all as they were. The full return estimator runs the whole 2026 return with every figure above.
Key takeaways
- Standard deduction $16,100 / $32,200 / $24,150; brackets indexed up; rates unchanged and now permanent.
- New for 2026: a $1,000 / $2,000 charitable deduction for non-itemizers and a 0.5%-of-AGI floor for itemizers.
- SALT cap $40,400, phasing down above $505,000; the tip, overtime, senior and car-loan deductions continue.
- Child Tax Credit $2,200 ($1,700 refundable); EITC up to $8,231; 401(k) $24,500; IRA $7,500; wage base $184,500.
- Higher W-2G thresholds and cost basis on Form 1099-DA change what arrives in the mail, not what is taxable.
Sources
- Rev. Proc. 2025-32: 2026 inflation adjustments (brackets, standard deduction, EITC, capital-gains thresholds, SALT cap): 2025-10-09
- IRS: Working Families Tax Cuts: the tip, overtime, senior and car-loan deductions: updated July 25, 2025
- IRS: Working Families Tax Cuts: provisions for individuals (charitable rules, SALT, Child Tax Credit): page read 3 Sep 2026
- Instructions for Forms W-2G and 5754 (Rev. January 2026): 2026 reporting thresholds: January 2026
- IRS: 401(k) contribution limits (Notice 2025-67 figures): page read 3 Sep 2026