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The IRS has unveiled its annual inflation adjustments for the 2026 tax year, rolling out a long list of changes to deductions, tax brackets and credits. The updates also include new provisions from the One Big Beautiful Bill Act.
These changes, which take effect for returns filed in 2027, are designed to keep pace with inflation and implement recent legislative updates intended to provide relief to working households.
With so many rule changes, tax filing tools can make filing easier by automatically applying new deductions, credits and bracket updates.
The 2026 Tax Shift: What’s Changing for Households and Workers
Starting in 2026, the One Big Beautiful Bill Act will bring several tax changes aimed at keeping up with rising prices and higher living costs.
Here are some changes to expect next year.
Higher Standard Deductions and Updated Brackets
For tax year 2026, the standard deduction will rise to $32,200 for married couples filing jointly, $16,100 for single filers or married individuals filing separately and $24,150 for heads of household.
Tax brackets are also moving upward. For married couples filing jointly, the 12% tax bracket will apply to incomes between $24,800 and $100,800, while the 22% bracket will apply to incomes from $100,801 to $211,400. Higher brackets will adjust similarly, with the top 37% rate applying to incomes over $768,700.
Estate and Family-Related Changes
Several family- and wealth-related tax breaks will rise in the tax year 2026.
The basic exclusion amount will rise to $15 million per decedent, up from $13.99 million in 2025. This gives families more flexibility to transfer assets without triggering the estate tax.
The adoption credit will also increase slightly, covering up to $17,670 in qualified expenses, compared to $17,280 in tax year 2025. Up to $5,120 of that credit may be refundable.
Seniors can continue to claim a bonus deduction of up to $6,000 through 2028, although it starts to phase out for higher-income households (individual filers with a modified adjusted gross income over $75,000 or joint filers with an income over $150,000).
Employer-Provided Child Care
One significant change under the One Big Beautiful Bill Act is the expansion of the employer-provided child care tax credit.
Starting in tax year 2026, the maximum credit will increase from $150,000 to $500,000 for most employers and up to $600,000 for eligible small businesses. The idea is to make it easier for companies to help working parents by covering or contributing to child care costs.
Using Online Tax Tools To Navigate 2026 Changes
With all the new rules taking effect, online tax software can simplify filing next year. Most programs will update automatically for 2026, so you won’t need to sort through every new deduction or credit.
Before filing, check that the software includes the 2026 updates and supports any specific deductions you may need, such as those for small businesses, estates or seniors.
Here are Forbes Advisor’s picks for the best tax software, selected by running real-life tax scenarios through each program and evaluating them based on cost, value, ease of use and customer support.
Bottom Line
The 2026 updates bring higher deductions and new tax breaks for many taxpayers, but they also add new complexities. With the One Big Beautiful Bill Act changing rules on tips and estate taxes, it’s imperative to carefully read IRS regulations.
Online tax filing tools can help simplify the process, but the surest way to file accurately is to review the changes, understand how they affect your taxable income and consult a tax professional.