Tax Changes for Individuals in 2026

What’s changing in 2026

1. 2026 Individual Tax Changes: Tax rates & brackets: relief continues

A big piece of the puzzle is that the law known as the One Big Beautiful Bill (OBBB) — passed in July 2025 — makes permanent many of the individual-tax rate cuts originally in the Tax Cuts and Jobs Act (TCJA).

• The marginal tax‐rate structure (for individuals) under the TCJA had rates from 10 % up to 37 %. Without the OBBB, many of those would have reverted upward in 2026.

• Because the OBBB “locks in” many of the cuts, the rates you’re used to may remain (which is good news).

Take-away: Unless your income changes materially, your marginal rate (the tax you pay on your next dollar of income) may stay similar to recent years. But small differences (deductions, credits, inflation adjustments) could still shift effective tax.

2. Standard deduction & older taxpayer relief

For 2026 Individual Tax Changes, the standard deduction keeps rising with inflation, and there are special tweaks for older taxpayers .For example:

• Individuals age 65+ (or blind) get an extra additional standard deduction—$2,050 for single/head-of-household in 2026; married filing jointly/separately get $1,650 per qualified individual for 65+.

• The baseline standard deduction amounts (for all taxpayers) will likewise rise (via inflation adjustment) though exact numbers for 2026 may still be updated.

  
  

Take‐away: If you take the standard deduction (versus itemizing), your deduction amount will increase slightly. If you’re 65 or older, you’ll see a little extra boost.

3. Family tax credits – bigger amounts

Certain credits aimed at families and children see enhancements:

• The Child Tax Credit is increased to $2,200 per qualifying child for 2026.

• The Adoption Tax Credit rises to about $17,670 and becomes partially refundable.

• The Earned Income Tax Credit (EITC) – maximum amounts go up for families with 3+ children, etc.

  
  

Take-away: If you qualify for child/adoption/EITC credits, you’ll likely see more generous benefit amounts. If you don’t, these changes may not matter to you.

4. Itemized deductions & SALT cap changes

If you itemize deductions (vs taking the standard deduction), there are important changes:

• The cap on the deduction for State and Local Taxes (SALT) rises to $40,000 (from the prior $10,000) for certain filers.

• New deductions created: for example, individuals may deduct “qualified tips” and “qualified overtime compensation” for 2025-2028 under OBBB.

  
  

Take-away: If you live in a high‐tax state (with large SALT payments) and itemize, this could make a big difference. If you take standard deduction, less impact.

5. Retirement and savings changes

Some older‐or‐advanced savings rules are shifting:

• For certain high‐income individuals, catch‐up 401(k) contributions must be made as Roth (after‐tax) rather than pre‐tax starting in 2026.

• Other savings vehicles continue to be subject to inflation indexing and potential law changes.

Take-away: If you’re age 50+ and contributing catch-up amounts to 401(k), you’ll want to check how this affects you. Otherwise, most retirement tax‐rules carry forward.

6. Estate, gift-tax and other one-off changes

Beyond just annual income taxes, there are changes affecting estates/gifts and miscellaneous deductions:

• The federal estate tax exemption rises (e.g., ~$15 million per individual) for decedents in 2026.

• There’s an excise tax (1%) on certain electronic transfers of funds from the U.S. to a foreign country for personal/household/family purposes starting January 1, 2026.

Take-away: If your net worth is high (estate/planning stage) or you send lots of money abroad, these are changes to watch. For many regular taxpayers, less direct impact.

Why these changes matter (and what you should do)

Here are some practical reasons and action-steps:

• Bracket creep is eased: Because the rates are preserved, you avoid a big automatic rate increase. But inflation and income growth can still push you into higher tax.

• Itemizing vs standard deduction: If you’ve been itemizing, you’ll want to compare with the new SALT limit and other deductions to see if standard deduction becomes comparatively better.

• Tax planning timing matters: If you were expecting big changes in 2026 tax law (e.g., rates going up), you may have to adjust timing of income or deductions.

• Credits = relief: If you have children or adopt, the increased credits mean more benefit—good to know for planning.

• Special cases matter: Seniors, high‐net‐worth individuals, high tax‐states residents, overseas transfers—they all face nuances.

• Keep an eye on legislation: Some changes (especially deductions for tips/overtime) are temporary (2025-2028) under the OBBB.

What to monitor closely

Because tax law is always a bit fluid, keep tabs on:

• The final numbers the Internal Revenue Service publishes (e.g., standard deduction, income‐bracket thresholds) for 2026.

• Your state tax laws: Federal changes may interplay with state credits/deductions impacted differently.

• Whether you should accelerate or delay income/deductions based on your situation (especially if you anticipate large income changes).

• Retirement/planning implications – e.g., where to place your catch‐up contributions, Roth vs pre‐tax, etc.

• The sunset (expiration) of temporary provisions—some tax breaks are limited to several years.