Understanding the 2026 Tax Changes: What You Need to Know

The IRS has announced significant tax adjustments for 2026 under the One Big, Beautiful Bill Act. These changes will impact millions of Americans when they file their 2026 tax returns in 2027. Here’s what you need to know to prepare.

Higher Standard Deductions Mean More Money in Your Pocket

One of the most welcome changes for taxpayers is the increase in standard deductions for 2026:

• Married couples filing jointly: $32,200 (up from $31,500 in 2025)
• Single filers and married filing separately: $16,100 (up from $15,750 in 2025)
• Heads of household: $24,150 (up from $23,625 in 2025)

These increases help protect taxpayers from “bracket creep,” where inflation pushes you into higher tax brackets without any real increase in purchasing power.

2026 Tax Brackets: What Income Thresholds Apply to You?

The federal income tax brackets have been adjusted for inflation. Here’s how the seven tax rates apply for 2026:

• 10% rate: Income up to $12,400 (single) or $24,800 (married filing jointly)
• 12% rate: Income over $12,400 (single) or $24,800 (married filing jointly)
• 22% rate: Income over $50,400 (single) or $100,800 (married filing jointly)
• 24% rate: Income over $105,700 (single) or $211,400 (married filing jointly)
• 32% rate: Income over $201,775 (single) or $403,550 (married filing jointly)
• 35% rate: Income over $256,225 (single) or $512,450 (married filing jointly)
• 37% rate: Income over $640,600 (single) or $768,700 (married filing jointly)

The top rate of 37% remains unchanged, but the income thresholds have increased to account for inflation.

Special Deductions for Seniors, Workers, and Families

The One Big, Beautiful Bill Act introduced several new deductions and benefits:

Senior Citizens Deduction

If you’re 65 or older, you can claim an additional $6,000 deduction ($12,000 for married couples where both qualify) for tax years 2025-2028. This phases out for higher earners with modified adjusted gross income over $75,000 ($150,000 for joint filers).

No Tax on Tips

Workers in tipped occupations can deduct qualified tips received, up to $25,000 annually. This applies to cash tips and charged tips in occupations identified by the IRS as customarily receiving tips.

No Tax on Overtime

You can deduct qualified overtime pay that exceeds your regular rate (the “time-and-a-half” premium portion), up to $12,500 annually ($25,000 for joint filers).

Car Loan Interest Deduction

Interest paid on loans for qualified vehicles assembled in the United States may be deductible, up to $10,000 annually. The vehicle must be for personal use and meet specific requirements.

Other Important Changes for 2026

• Alternative Minimum Tax (AMT) exemptions: $90,100 for single filers, $140,200 for married couples filing jointly
• Estate tax exclusion: Increased to $15,000,000 (up from $13,990,000 in 2025)
• Adoption credit: Maximum of $17,670, with up to $5,120 refundable
• Earned Income Tax Credit (EITC): Up to $8,231 for families with three or more qualifying children
• Health FSA contributions: Capped at $3,400 with a $680 carryover limit

Clean Energy Credit Changes

Several clean energy credits have been modified or eliminated:

• New and Used Clean Vehicle Credits (30D and 25E) ended September 30, 2025
• Commercial Clean Vehicle Credit (45W) ended September 30, 2025
• Energy Efficient Home Improvement Credit (25C) ends December 31, 2025
• Residential Clean Energy Credit (25D) ends December 31, 2025

Need Help with Tax-Related Documents?

Tax law changes can be complex, and many require proper documentation, notarization, or legal filing. Whether you need documents notarized for tax purposes, estate planning in light of the new estate tax exclusions, or process serving for tax-related matters, Wet Ink Notary LLC is here to help.

Our professional notary and process serving services ensure your important documents are handled correctly and efficiently. Don’t let paperwork delays impact your tax planning or legal matters.

📞 Call or text Wet Ink Notary LLC today to schedule an appointment or learn more about how we can assist with your notary and process serving needs.

Additional Resources

For complete details on the One Big, Beautiful Bill Act provisions, visit the IRS official guidance page.

Disclaimer: This blog post is for informational purposes only and does not constitute tax advice. Consult with a qualified tax professional for guidance specific to your situation.