What Are the Federal Tax Rates for 2026
For 2026, the federal income tax rates remain the same as in 2025: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
What has changed is the income ranges (the “brackets”) associated with each rate. The agency that sets the thresholds, Internal Revenue Service (IRS), adjusted the brackets upward for inflation under the 2026 schedule.
In addition, the standard deduction has increased for 2026: $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of households.
Tax Rates 2026 vs 2025 at a Glance
Here’s a simple side-by-side comparison of the key federal income tax thresholds (single filer) between 2025 and 2026:
| Bracket Rate | 2025 (Single) | 2026 (Single) |
|---|---|---|
| 10% | Up to $11,925. | Up to $12,400 |
| 12% | $11,925–$48,475 | $12,401–$50,400 |
| 22% | $48,475–$103,350 | $50,401–$105,700 |
| 24% | $103,350–$197,300 | $105,701–$201,775 |
| 32% | $197,300–$250,525 | $201,776–$256,225 |
| 35% | $250,525–$626,350 | $256,226–$640,600 |
| 37% | Over $626,350 | Over $640,600 |
Also notable: the 2026 standard deduction amounts are higher than 2025’s ($15,750 for singles, $31,500 for married filing jointly, $23,625 for heads of household in 2025) under the law One Big Beautiful Bill Act (OBBBA).
In short: while the marginal tax rates are unchanged, the thresholds have increased. This means taxpayers need to earn more income in 2026 before hitting the higher brackets (assuming similar 2025 thresholds).
Will Capital Gains Tax Rates Change in 2026
As of the 2026 update, the main news concerns ordinary income tax brackets and standard deductions. The federal marginal income tax rates remain unchanged, and the inflation adjustment only affects the thresholds, not the percentage rates themselves.
Long-term capital gains continue to follow the existing preferential tax regime (e.g., 0%, 15%, 20% for qualifying gains), and there has been no public announcement of a change to those percentages as part of the 2026 update.
That said, because income thresholds (for ordinary income) and deductions are rising, your effective taxable income might shift, which could indirectly influence which capital-gains bracket you end up in.
Ordinary Income Tax Rates for 2026
- The ordinary tax rates themselves remain the same at 10%–37%.
- What changes is the amount of income taxed in each bracket: bracket thresholds are higher in 2026.
- The result: many taxpayers may need to earn more income in 2026 to hit the same bracket as in 2025 — potentially reducing “bracket creep” if their income grows only modestly with inflation.
- Plus: the larger standard deduction (e.g. $16,100 for singles) can lower taxable income, which may reduce overall tax liability if you take the standard deduction rather than itemizing.
How Inflation Adjustments Affect 2026 Tax Rates
Every year, the IRS reviews inflation data, typically from the CPI (Consumer Price Index), and adjusts the income thresholds for tax brackets and standard deductions so that taxpayers don’t get pushed into higher brackets just because of inflation, a phenomenon known as “Bracket creep.”
For 2026, these inflation adjustments plus the provisions under OBBBA resulted in modest but meaningful increases to nearly all thresholds and deductions.
In practical terms, this means that if your income rises slightly, for example, due to a cost-of-living raise, you’re less likely to be bumped into a higher marginal bracket just because of inflation. The adjustments help preserve your real (inflation-adjusted) purchasing power.
What Business Owners Need to Know About 2026 Tax Rates
- If you are a small business owner and report income as an individual (e.g., pass-through income from a sole proprietorship, partnership, S-Corp, or LLC taxed as a pass-through), these same bracket changes apply — so the income thresholds for ordinary income remain shifted upward.
- The increased standard deduction and updated income brackets might benefit small business owners, especially if they take the standard deduction and don’t itemize.
- Non-wage-related tax items have also been adjusted: for example, the 2026 dollar limits for health flexible spending accounts (FSAs), contribution and exclusion amounts, and other tax-benefit thresholds were updated.
- Other provisions under OBBBA and the 2026 update, such as adjustments to credits, exclusions, and various limits — may affect business-related deductions, reimbursements, or employee benefits.
Business owners should review their 2026 projected income, deductions, and withholding to estimate how these changes may influence their net tax liability.
IRS Guidance and Federal Updates for 2026 Tax Rates
- The 2026 federal tax-bracket thresholds and standard deduction amounts became official with the IRS release in late 2025.
- Under the law One Big Beautiful Bill Act (OBBBA), the existing marginal rate structure (7 brackets, 10%–37%) was preserved and made permanent — meaning no new brackets or dramatic rate shifts for 2026.
- The IRS also adjusted dozens of other provisions: not just ordinary income tax thresholds, but limits on credits, deductions, exclusions, and benefit thresholds (e.g., foreign earned income exclusion, FSA contribution limits, medical savings account thresholds, etc.) for 2026.
- Because the thresholds changed only modestly (not dramatically), many taxpayers will see relatively small to moderate changes in their tax liability; unless their income puts them near the edge of a bracket or they take advantage of other credits/ deductions under the 2026 adjustments.
Conclusion
The 2026 tax-year changes reflect what many taxpayers expected: same marginal rates, higher thresholds. Thanks to inflation adjustments and the provisions of OBBBA, the income ranges for each bracket and the standard deduction went up, which helps to avoid bracket creep if incomes or wages grow modestly. For many individuals and business-owners, this could mean slightly lower effective tax rates or a softer increase in liability; even if they earn more in nominal terms.
That said, the base rate structure remains unchanged, meaning that as income increases beyond threshold boundaries, higher marginal rates still apply. Smart planning, especially around deductions, withholding, and expected income, can help you make the most of the 2026 adjustments.
FAQs
Q: Do the marginal tax rate percentages change in 2026?
No. The seven federal income tax rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) remain the same in 2026 as in 2025.
Q: What changed for 2026 compared to 2025?
The income thresholds for each tax bracket were raised (to adjust for inflation), and the standard deduction amounts increased.
Q: Will more people pay less tax because of these changes?
It depends on your income and deductions. If your income grows only modestly (e.g., with inflation) and you take the standard deduction, you may pay relatively less tax or avoid being bumped into a higher bracket. But high earners may still see larger tax liability when their income exceeds the new thresholds.
Q: Do these changes affect capital gains taxes?
The 2026 update primarily affects ordinary income tax brackets and standard deductions. Capital gains preferential rates remain, but depending on your total taxable income, you may land in a different effective tax situation.
Q: What should small business owners do with this information?
Business owners should review projected 2026 income, deductions, and expected taxable income, especially for pass-through entities, to estimate their tax liability under the new thresholds. They may also want to revisit deductions, withholding, and other benefit contributions given the updated limits.
