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IRS Raises Income Thresholds for 2026 Tax Brackets
9 Oct
Summary
- Income brackets moving up for 2026 tax year
- Biggest increase for lowest brackets due to new tax law
- 4% inflation adjustment for lowest two brackets, 2.3% for higher
According to the latest announcement from the Internal Revenue Service (IRS), the income brackets that determine Americans' tax rates will be adjusted upward for the 2026 tax year. The changes are intended to account for inflation, with the lowest two tax brackets seeing a 4% increase and the higher brackets a 2.3% rise.
This means that in 2026, it will take more income to reach each higher tax bracket compared to the current thresholds. The adjustments are based on formulas tied to the rate of inflation. The move comes as a result of this year's new tax law, which is driving the bigger increase for the lowest income levels.
Overall, the IRS is making these annual adjustments to ensure the tax system keeps pace with the rising cost of living. The changes will impact how much Americans pay in taxes starting in the 2026 tax year.
