Tax season is around the corner, and the Internal Revenue Service (IRS) has just announced significant inflation adjustments for the 2026 tax year. If you are worried about rising costs, there is good news: You might keep more of your paycheck this year.
Here is a quick breakdown of the new IRS tax deductions and bracket changes trending in the US today.
1. Higher Standard Deduction
To combat inflation, the IRS has raised the standard deduction. This means you can earn more money before you start paying federal taxes.
- Single Filers: The deduction has increased significantly (approx. $15,000+).
- Married Filing Jointly: Couples will see a bump to over $30,000.
- Why this matters: Millions of Americans won't need to itemize their deductions anymore, making filing easier and faster.
2. Adjusted Tax Brackets
The income thresholds for each tax bracket have been shifted upward by roughly 2.8% to 3%.
- What this means: If you got a small raise at work, these new brackets ensure you aren't accidentally pushed into a higher tax rate solely due to inflation.
3. Earned Income Tax Credit (EITC) Boost
For low-to-moderate-income families, the maximum EITC amount has been increased. Families with three or more qualifying children could see a credit worth nearly $8,000 this year.
4. Health Savings Account (HSA) Limits
Good news for those saving for medical expenses: The contribution limit for HSAs has increased for both individuals and families. This money is 100% tax-deductible.
5. 401(k) Contribution Limits
Planning for retirement? The IRS now allows employees to contribute more to their 401(k) plans tax-free. If you are over 50, the "catch-up" contribution limit is even higher.
Conclusion
While taxes are never fun, these 2026 adjustments are designed to help your wallet stay ahead of inflation. Make sure to consult with a tax professional to maximize your refund this year!
Are you planning to file early this year? Let us know in the comments.
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