Overview of the 2026 Inflation Adjustments Under the OBBB
- The IRS issued Revenue Procedure 2025-32 on October 9, 2025 updating inflation adjustments for over 60 tax provisions—tax brackets, standard deductions, earned income tax credit amounts, etc.—with some changes driven directly by the One, Big, Beautiful Bill (OBBB) (irs.gov).
- These adjustments affect thresholds, phaseouts, and credit amounts—potentially altering effective tax rates for many taxpayers.
Key Adjusted Items to Know
| Item | 2025 Amount | 2026 Adjusted Amount* |
|---|---|---|
| Standard Deduction (Single) | $13,850 | (may increase due to inflation) |
| Married Filing Jointly | $27,700 | (similar inflation rise) |
| 22%, 24%, 32% Brackets | Thresholds move upward | Raising income levels for each bracket |
| Earned Income Tax Credit & Child Tax Credits | Phase-out at set incomes | Phase-outs shift upward slightly |
*Exact numbers published in Rev. Proc. 2025-32—refer IRS source for full schedule. (irs.gov)
Planning Strategies Based on These Adjustments
- Timing Income & Expenses: If you expect to be in a higher bracket in 2026, consider accelerating deductible expenses into 2025 or deferring income until 2026 where feasible.
- Review Withholding or Estimated Taxes: With thresholds shifting, review whether too much or too little is withheld. Adjust via W-4 or estimated payments to match new bracket realities.
- Maximize Tax-Advantaged Accounts: OBBB changes may affect phase-out thresholds for contributions; prioritizing retirement or savings accounts before year-end can help reduce taxable income.
Example Scenario
- Case: Alex, a married couple filing jointly, projects $150,000 in taxable income in both 2025 and 2026. With thresholds rising, their 24% bracket may now start at a slightly higher income, so in 2026 they’d reach 32% later. By shifting some income or maximizing deductions in 2025, they reduce exposure to higher rates.
Watch for Expiring Provisions and Credits
- OBBB includes expirations (e.g., tips deduction, child tax credit increase) often tied to 2028. If certain credits expire, differences between 2026 and later years could be material—as such, planning ahead is key. (en.wikipedia.org)
Actionable Checklist for Tax Planning in Late-2025
- Use updated tax brackets and deduction schedules to project your 2026 tax liability.
- Adjust estimated tax payments (if required) mid-quarter where possible to avoid underpayment penalties.
- Explore bunching deductions (charitable, medical) when applicable to maximize itemized deductions vs standard deduction.
Bottom Line: Inflation adjustments under the OBBB shift many thresholds. By staying on top of these changes now, you avoid surprises next tax season and optimize your tax outcomes.