With the 2026 tax year underway, the IRS has implemented significant updates including inflation-adjusted brackets, a revised state and local tax (SALT) cap, and new incentives for family savings.
2026 Federal Income Tax Brackets and Standard Deduction
For the 2026 tax year, the IRS has released the inflation-adjusted thresholds for the seven progressive tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These rates remain at their current levels following legislative updates earlier this year. For single filers, the 37% marginal rate now applies to taxable income exceeding $640,600, while for married couples filing jointly, the threshold has moved to $768,700. The standard deduction has also increased to $16,100 for single filers and $32,200 for married couples filing jointly, providing a larger base of non-taxable income for most households.
Increased SALT Cap and Mortgage Interest Rules
A major shift for the 2026 tax year is the increase in the state and local tax (SALT) deduction limit. The overall cap for deductible state and local income, sales, and property taxes has risen to $40,000 ($20,000 for married individuals filing separately), though this limit begins to phase out for taxpayers with modified adjusted gross incomes exceeding $500,000. Additionally, the mortgage interest deduction has reverted to allow interest on up to $1 million of acquisition debt for primary residences, a significant increase from the previous $750,000 limit.
Child Savings Incentives and Charitable Deductions
The IRS has introduced new filing options for 2026, including Form 4547 for a specialized savings vehicle. This allows authorized individuals to establish accounts for children born between 2025 and 2028, with certain filers eligible for a $1,000 pilot program contribution. Furthermore, a new charitable provision allows non-itemizing taxpayers to deduct cash donations of up to $1,000 ($2,000 for joint filers) directly from their gross income, encouraging philanthropic giving even for those who claim the standard deduction.
Primary sources and further reading
- IRS Revenue Procedure 2025-32
- IRS Publication 17 (2026 Edition), Your Federal Income Tax
- IRS Notice 2026-25
Tax rules depend on the tax year and individual circumstances. Confirm the current IRS guidance before filing.