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KEY TAKEAWAYS
- The 2026 tax brackets increased by about 2.3% compared with the year prior, so if your wages don’t increase by more than that percentage next year, you should be taxed at the same rate.
- The increased tax breaks from the One Big Beautiful Bill Act lower taxes for many Americans and could allow you to lower your withholding amount for your paycheck in 2026.
Tax rules are changing for 2026, potentially affecting how much of your paycheck you keep.
The IRS has raised next year’s tax brackets by about 2.3% and expanded several deductions and credits under this year’s One Big Beautiful Bill Act (OBBBA).
Here’s what the new brackets look like and how they could change your take-home pay.
Why This Matters to You
Understanding the 2026 tax changes now can help you avoid surprises later. With brackets shifting and new deductions kicking in, you may be able to adjust your withholding, increase your take-home pay, or plan ahead for a smaller tax bill. A few minutes of preparation now could mean more money in your pocket next year.
For 2026 taxes, the tax bracket income levels are increasing by about 2.3%. These yearly increases are intended to keep pace with inflation and ensure that Americans pay the same proportion of taxes, so unless your income rises by more than 2.3% next year, you’ll be taxed at the same rate.
| The 2026 Tax Brackets | ||
|---|---|---|
| Tax Rate | 2026 single or married filing separately | 2026 married, filing jointly |
| 37% | $640,601 or more | $768,701 or more |
| 35% | $256,226-$640,600 | $512,451-$768,700 |
| 32% | $201,776-$256,225 | $403,551-$512,450 |
| 24% | $105,701-$201,775 | $211,401-$403,550 |
| 22% | $50,401-$105,700 | $100,801-$211,400 |
| 12% | $12,400-$50,400 | $24,801-$100,800 |
| 10% | $12,400 or less | $24,800 or less |
New Deductions May Allow You To Keep More of Your Paychecks in 2026
The OBBBA expanded on President Donald Trump’s Tax Cuts and Jobs Act, making some tax credits and deductions more generous and creating new ones that will lower the tax bills of many Americans.
In particular, the OBBBA made a one-time retroactive increase to the standard deduction for 2025 taxes, increasing it from $750 to $1,500, depending on the taxpayer’s filing status. The standard deduction will continue to rise annually with inflation, and for the 2026 tax year, it is expected to be about 2.2% higher than the 2025 increased standard deduction.
| The 2026 Standard Deduction | ||
|---|---|---|
| Single or married filing separately | Married filing jointly | Heads of households |
| $16,100 | $32,200 | $24,150 |
Other tax breaks, such as the earned income tax credit, state and local tax deduction, as well as others like the tip and overtime deduction, are expected to cut the average middle-income household’s 2026 taxes by about $1,800 and $150 for the lowest-income households, according to a report by the Tax Policy Center.
That means you may be able to keep more of your paycheck in 2026 by decreasing your withholding amount, rather than waiting for any refunds later when you file your taxes.
The IRS typically recommends decreasing your withholding amount if you are eligible for tax breaks, such as the child tax credit or the standard deduction. Doing so means less is taken out in Social Security and Medicare taxes for every paycheck, but it will ultimately result in either an increased tax bill or a smaller refund.
Thanks to the expanded credits and deductions, many taxpayers will see their 2026 tax bill shrink. That means even if you lower your withholding to boost your paycheck throughout the year, the savings from the new law could help your final refund or balance due stay roughly the same as last year.
Knowing how these changes affect your bottom line can help you adjust your withholding so you don’t face any surprises the following April.
