Tax Planning
How the 2026 Tax Inflation Adjustments Can Reshape Your Tax Planning
The IRS has released the tax year 2026 inflation adjustments under the One, Big, Beautiful Bill—the changes to key thresholds like standard deductions, marginal brackets, and tax credits could significantly impact your planning.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## What’s Changing Under the Inflation Adjustments
IRS’s **Revenue Procedure 2025-32** outlines changes for tax year 2026 (returns filed in 2027) under the *One, Big, Beautiful Bill Act (OBBBA)*. These inflation adjustments include:^1 ■ Standard deduction increases: married filing jointly rises to **$32,200**, single filers to **$16,100**, heads of households to **$24,150**. ([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))
■ Marginal tax brackets shift upward, reducing bracket creep. Top rate stays at **37%** for income over $640,600 (single), $768,700 (married filing jointly). Other brackets adjust accordingly. ([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))
■ Alternative Minimum Tax (AMT) exemption amounts go up. Estate tax basic exclusion is increased to **$15,000,000**, up from ~$13.99 million. Adoption credit becomes more generous amid other adjustments. ([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))
## Why It Matters: Actionable Tax Planning Moves
- **Reevaluate your filing status**: The gap between married filing jointly and head of household standard deductions could justify changing status or timing income or deductions. If eligible, filing as head of household can bring substantial benefit.
- **Shift income timing**: Bunch income into years with higher deduction thresholds or delay income from 2025 into 2026 if you expect to benefit from larger deductions. Especially useful for retirees, contractors, or small business owners.
- **Maximize tax credits**: Larger EITC limits, increased childcare credits, and enhancements to employer-provided benefits like childcare now mean some employees and employers should revisit their benefits composition. Employers should consider adjusting offerings in anticipation of the changes. ([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))
## Practical Example
> *Sarah and John* are married filing jointly and expect their combined taxable income in 2026 to be about $100,000. Under tax year 2025 rules, much of their income fell into the 22% bracket with standard deduction ~$31,500. In 2026, with that same income, their standard deduction increases to $32,200 and the bracket thresholds shift upward—so more of their income gets taxed at 12% or 22% instead of dipping into 24% earlier. This adjustment can result in several hundred dollars kept in their pocket by avoiding bracket creep.
## Key Takeaways for Tax Planning
- Adjust withholding and estimated tax payments to reflect higher standard deductions and changed brackets.
- Keep an eye on threshold dates—e.g., estate planning moves or large gifts should factor in the higher exclusions starting in 2026.
- If you make extensive employer-provided childcare arrangements or use flexible spending plans, confirm you're using the new higher limits.
**Bottom line**: With 2026 inflation adjustments, proactive taxpayers can preserve more income, shift timing, and capture more deductions and credits. *By anticipating and acting, planning beats reacting.*