As of late September 2026, taxpayers are navigating a stabilized landscape following the permanent extension of key tax rates and significant upward adjustments to standard deductions and retirement limits.
Permanency of Individual Tax Rates
Following the enactment of the One Big Beautiful Bill Act (OBBBA) in 2025, the individual income tax rates originally introduced by the Tax Cuts and Jobs Act (TCJA)—which were historically scheduled to expire—have been made permanent. For the 2026 tax year, the seven tax brackets remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top 37% rate now applies to single filers with taxable income exceeding $640,600 and married couples filing jointly with income over $768,700.
Inflation Adjustments to the Standard Deduction
The IRS has released the 2026 inflation adjustments, significantly raising the standard deduction to help offset rising costs. For the 2026 tax year, the standard deduction is $32,200 for married couples filing jointly, $16,100 for single taxpayers and married individuals filing separately, and $24,150 for heads of households. These amounts represent an increase from the 2025 historical levels of $31,500 for joint filers and $15,750 for singles.
Qualified Business Income (QBI) Deduction Status
Small business owners and pass-through entity members can continue to benefit from the Section 199A deduction. Previously set to sunset at the end of 2025, the QBI deduction was made permanent by 2025 legislation. For 2026, the phase-in ranges for wage and investment limits have been expanded to $150,000 for married couples filing jointly and $75,000 for other taxpayers, providing greater access to the 20% deduction for higher-earning business owners.
New Deduction for Seniors (Age 65+)
A new benefit introduced for the 2025-2028 window provides a temporary $6,000 deduction for taxpayers aged 65 or older ($12,000 for joint filers where both spouses qualify). This deduction is available regardless of whether the taxpayer itemizes or takes the standard deduction, though it begins to phase out for individuals with modified adjusted gross incomes above $75,000 ($150,000 for joint filers).
Estate and Gift Tax Exemptions
The federal estate and gift tax exclusion amount has increased to an inflation-adjusted $15,000,000 per individual for 2026. This higher threshold has been made permanent, providing long-term certainty for estate planning and wealth transfer strategies.
Primary sources and further reading
- IRS News Release IR-2025-103: IRS announces tax year 2026 annual inflation adjustments
- IRS Revenue Procedure 2025-32
Tax rules depend on the tax year and individual circumstances. Confirm the current IRS guidance before filing.