New tax brackets, larger standard deductions and expanded tax credits are now in place — changes expected to lower income taxes and increase take-home pay for many Americans starting in 2026 and beyond.

Why it matters

The latest IRS updates reflect both annual inflation adjustments and major tax reforms enacted last summer under the One Big, Beautiful Bill Act (OBBBA). The law permanently extends several provisions from the 2017 tax overhaul, originally signed during President Trump’s first term.

Among the most significant updates are new tax relief for seniors, expanded benefits for tipped workers, and the continuation of pro-growth tax policies aimed at preserving workers’ purchasing power.

What to know

Tax changes introduced by last year’s legislation — including adjustments to how Social Security income is taxed and the elimination of federal income tax on tips — will be claimed on tax returns filed in 2026.

Meanwhile, the IRS’s newly released 2026 tax brackets are already beginning to influence paycheck withholding and will apply fully to tax returns filed in 2027.

The big picture

Each year, the IRS updates more than 60 tax provisions to prevent “bracket creep,” a phenomenon in which inflation pushes taxpayers into higher tax brackets without an actual increase in real income. These adjustments are designed to protect workers from paying more simply because prices have risen.

Standard deduction increases

Under the OBBBA, the IRS revised standard deduction amounts for the 2025 tax year, which apply to returns filed in 2026. The updated deductions are:

• $31,500 for married couples filing jointly (up from $30,000)

• $15,750 for single filers (up from $15,000)

• $23,625 for heads of household (up from $22,500)

Normally, the standard deduction is adjusted annually for inflation. However, the new law increased the deductions ahead of schedule and made those higher levels permanent, resetting the baseline for future inflation adjustments.

Paycheck impact

The IRS has also released updated 2026 tax withholding tables, which determine how much federal tax employers withhold from employee paychecks. According to the Tax Foundation, these updates are designed so that tax cuts are delivered directly through higher take-home pay, rather than waiting for refunds.

New tax break for seniors

A new $6,000 federal tax deduction for Americans aged 65 and older took effect with the 2025 tax year, offering relief to seniors who owe taxes on Social Security income.

Key details include:

• The deduction applies through the 2028 tax year

• It is available to both itemizers and non-itemizers, on top of the standard deduction

• Married couples where both spouses qualify may deduct up to $12,000 total

• The benefit begins to phase out for individuals with modified adjusted gross income above $75,000 (or $150,000for joint filers), according to the IRS