"Are my taxes going up or down?" This is the question on every taxpayer's mind each year. For 2026, the answer depends on your situation, but here's what's actually changing and how it affects you.
Table of Contents
- The Short Answer
- What's Going Up (Inflation Adjustments)
- What's Staying the Same
- What's Going Down (For Most People)
- How It Affects Different Income Levels
- State Tax Considerations
- The Bottom Line for You
The Short Answer
For Most People: Slightly Down or About the Same
If your income stays the same:
- Your taxes will likely be slightly lower in 2026
- Due to inflation adjustments (brackets and deductions increased)
- But the difference is usually small ($50-$200 for most people)
If your income increases with inflation:
- Your taxes will likely be about the same in real terms
- Slight increase in dollar amount
- But similar real tax burden
If your income increases more than inflation:
- Your taxes will likely increase
- Because you're earning more
- But you're also keeping more after-tax
The Reality
Most people see small changes (up or down $100-$300), not dramatic increases or decreases. The tax system is designed to be relatively stable year-to-year.
What's Going Up (Inflation Adjustments)
Tax Brackets
All bracket thresholds increased ~5.4% for 2026:
Single Filers:
- 10% bracket: Now $0 - $11,600 (was $11,000)
- 12% bracket: Now $11,601 - $47,150 (was $44,725)
- 22% bracket: Now $47,151 - $100,525 (was $95,375)
- 24% bracket: Now $100,526 - $191,950 (was $182,050)
- And so on...
Married Filing Jointly:
- 10% bracket: Now $0 - $23,200 (was $22,000)
- 12% bracket: Now $23,201 - $94,300 (was $89,450)
- 22% bracket: Now $94,301 - $201,050 (was $190,750)
- And so on...
Impact: You can earn more before moving into higher brackets
Standard Deduction
Increased ~5.4%:
- Single: $15,400 (up from $14,600)
- Married: $30,800 (up from $29,200)
- Head of Household: $23,100 (up from $21,900)
Impact: Lower taxable income for most people
Retirement Contribution Limits
Increased:
- 401(k): $24,000 (up from $23,000)
- IRA: $7,500 (up from $7,000)
- HSA: $4,150 single / $8,300 family (increased)
- Catch-up contributions: Unchanged for most
Impact: Can save more pre-tax, reducing taxable income
Earned Income Tax Credit (EITC)
Increased ~5.4%:
- 1 child: Up to $4,443 (up from $4,213)
- 2 children: Up to $7,340 (up from $6,960)
- 3+ children: Up to $8,256 (up from $7,830)
Impact: More credit for eligible taxpayers
Estate Tax Exemption
Increased:
- Per person: $14,320,000 (up from $13,610,000)
- Married couples: $28,640,000 combined
Impact: Only affects very high net worth individuals
What's Staying the Same
Tax Rates
All seven tax rates unchanged:
- 10%, 12%, 22%, 24%, 32%, 35%, 37%
No rate increases or decreases
Most Credits
Child Tax Credit: $2,000 per child (unchanged) American Opportunity Credit: $2,500 (unchanged) Lifetime Learning Credit: $2,000 (unchanged)
Note: Some credits don't adjust for inflation, so real value decreases
SALT Deduction Cap
Still capped at $10,000 (doesn't adjust for inflation)
Problem: Real value decreases over time, especially for high-tax states
Mortgage Interest Deduction Limit
Still $750,000 debt limit (doesn't adjust)
Impact: Real value decreases with inflation
Capital Gains Rates
Long-term capital gains rates unchanged:
- 0%, 15%, 20% (depending on income)
Net Investment Income Tax: Still 3.8% (unchanged)
What's Going Down (For Most People)
Your Tax Bill (If Income Stays Same)
Example: Single, $60,000 income
2025:
- Gross: $60,000
- Standard Deduction: $14,600
- Taxable: $45,400
- Tax: ~$5,200
2026:
- Gross: $60,000 (same)
- Standard Deduction: $15,400 (higher)
- Taxable: $44,600 (lower)
- Tax: ~$5,100 (lower)
Savings: ~$100
Why: Higher standard deduction reduces taxable income
Effective Tax Rate (For Same Income)
If your income stays the same:
- Higher standard deduction = lower taxable income
- Lower taxable income = lower tax
- Effective rate decreases slightly
Example: $60,000 income
- 2025 effective rate: ~8.7%
- 2026 effective rate: ~8.5%
- Slight decrease
How It Affects Different Income Levels
Low Income (<$50,000)
Impact: Slightly better
Why:
- Higher standard deduction helps
- EITC increased (if eligible)
- Stay in lower brackets longer
Example: $40,000 income
- 2025 tax: ~$3,000
- 2026 tax: ~$2,900
- Savings: ~$100
Middle Income ($50,000-$150,000)
Impact: Slightly better (if income stays same)
Why:
- Higher standard deduction
- Bracket thresholds increased
- Can earn more before higher brackets
Example: $75,000 income
- 2025 tax: ~$8,500
- 2026 tax: ~$8,400
- Savings: ~$100
High Income ($150,000-$500,000)
Impact: Slightly better (if income stays same)
Why:
- Higher standard deduction
- Bracket thresholds increased
- But may hit phase-outs
Example: $200,000 income
- 2025 tax: ~$35,000
- 2026 tax: ~$34,500
- Savings: ~$500
Very High Income ($500,000+)
Impact: Slightly better (if income stays same)
Why:
- Bracket thresholds increased
- Can earn more before 35% and 37% brackets
- But may have other considerations
Example: $500,000 income
- 2025 tax: ~$130,000
- 2026 tax: ~$129,000
- Savings: ~$1,000
State Tax Considerations
State Taxes Also Adjust
Most states adjust brackets and deductions for inflation (similar to federal)
Impact:
- State taxes may also decrease slightly (if income stays same)
- Or increase slightly (if income increases with inflation)
Check Your State: State adjustments vary
High-Tax States
Problem: SALT cap ($10,000) doesn't adjust
Impact:
- Real deduction value decreases
- High-tax state residents pay relatively more over time
- Especially affects CA, NY, NJ, CT residents
Example: $25,000 state tax
- Can only deduct $10,000 (capped)
- Real value of deduction decreases with inflation
- Problem: Cap becomes more restrictive
The Bottom Line for You
If Your Income Stays the Same
Your taxes will likely be slightly lower:
- Higher standard deduction
- Higher bracket thresholds
- Savings: Usually $50-$200 (depending on income)
If Your Income Increases with Inflation (~5.4%)
Your taxes will likely be about the same:
- Income increases 5.4%
- Brackets increase 5.4%
- Deductions increase 5.4%
- Result: Similar real tax burden
If Your Income Increases More Than Inflation
Your taxes will increase:
- You're earning more
- May move to higher bracket
- But you're also keeping more after-tax
If Your Income Decreases
Your taxes will decrease:
- Lower income = lower tax
- May move to lower bracket
- But you're also earning less
Key Factors
What Matters:
- Your income change (vs. inflation)
- Your deductions (standard or itemized)
- Your credits (which ones you qualify for)
- Your state (if high-tax state, SALT cap issue)
What Doesn't Matter Much:
- Tax rates (unchanged)
- Most credits (unchanged)
- Basic structure (unchanged)
Bottom Line
For 2026, taxes are going slightly down for most people (if income stays the same), due to inflation adjustments:
- Brackets increased: Can earn more before higher brackets
- Standard deduction increased: Lower taxable income
- EITC increased: More credit for eligible
- Retirement limits increased: Can save more pre-tax
But the changes are small ($50-$200 for most people), not dramatic.
Key Takeaways:
- Most people: Slightly lower taxes (if income stays same)
- If income increases with inflation: About the same real tax burden
- If income increases more: Taxes increase (but you earn more)
- Changes are small: Usually $50-$200, not dramatic
- Rates unchanged: No rate increases or decreases
- Structure stable: Basic tax system unchanged
Action Steps:
- Understand that changes are usually small
- If income stays same, expect slight decrease
- If income increases, expect slight increase
- Take advantage of increased retirement limits
- Review your situation annually
- Adjust withholding if needed
Remember: Tax changes in 2026 are mostly inflation adjustments, not major structural changes. For most people, the impact is small. Focus on what you can control: maximizing deductions, claiming credits, and optimizing your tax situation.