Tax Planning
Federal Inflation Adjustments 2026: What Individuals & Businesses Should Know
Major inflation-linked tax thresholds and deductions are rising in 2026 under the "One, Big, Beautiful Bill"—here’s what they are and how to use them in tax planning.
By NomadicTax Research Team • 5-8 min read • March 29, 2026
## What’s Changing in 2026? Key Inflation-Indexed Thresholds
The IRS released adjustments covering more than 60 tax provisions under the One, Big, Beautiful Bill. Some highlights include:([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill/?utm_source=openai))
| Provision | 2025 Level | 2026 Adjusted Level |
|---|---|---|
| Standard Deduction (Single) | $15,750 | **$16,100** |
| Married Filing Jointly | $31,500 | **$32,200** |
| Foreign Earned Income Exclusion | $130,000 | **$132,900** |
| Earned Income Tax Credit (3+ children) | Approx. $8,046 | **$8,231** |
| Transportation Fringe Benefit (monthly) | $325 | **$340** |
Other changes affect things like Maximum Out-of-Pocket for health plans, employee FSA carryovers, and thresholds for AMT exemptions.([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill/?utm_source=openai))
## Planning Strategies You Can Use Now
- **Maximize deductions while you can**. With standard deductions up, it may reduce the appeal of itemizing for many.
- **Use the updated Foreign Earned Income Exclusion** if you're a digital nomad or frequently work abroad—$2,900 more is meaningful.
- **Review health benefits options** because out-of-pocket maximums and deductibles adjusted higher.
- **Plan charitable giving & withholding carefully**, especially if you're close to phase-out thresholds under the updated rules.
## How These Changes Affect Different Stakeholders
- **Individuals** see less taxable income due to higher standard deductions and updated credits.
- **Families with kids** benefit from increases in EITC thresholds and transportation benefits.
- **Expats and remote workers** will appreciate the inflation bump in foreign income exclusions—but watch phase-out rules.([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill/?utm_source=openai))
- **Employers** should update payroll systems for withholding changes and fringe benefit limits.
## Actionable Steps for 2026 Tax Season
1. Update your **payroll tax tables and withholding** to match new thresholds (April 2026) to avoid under-withholding.
2. Reevaluate your eligibility for tax credits like EITC, child-related credits, etc.
3. If itemizing deductions, calculate whether the standard deduction now outweighs itemizing.
4. Remote workers and digital nomads should review treaties and exclusion limits.
**Bottom line:** These changes aren’t minor. They give you an opportunity to save, reduce risk, and plan ahead—especially for people who move across borders or run small businesses. Make sure you're using the right numbers for 2026 before you file or make financial decisions.