The IRS has released its annual inflation adjustments for tax year 2026, affecting more than 60 provisions, including rate brackets, deductions, and various credits. The changes, outlined in Revenue Procedure 2025-32, will apply to returns filed in 2027. 

According to Accounting Today, the standard deduction will rise $32,200 for married couple filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household. The top marginal tax rate remains at 37 percent for single filers earning more than $640,600 and $768,700 for joint filers. The other brackets range from 10 to 35 percent, with incremental thresholds reflecting inflation. 

The alternative minimum tax exemption will be $90,100 for single filers and $140,200 for married couples filing jointly. The estate tax exclusion increases to $15 million, up from nearly $14 million in 2025. 

Several credits and benefits will also adjust upward. The adoption credit rises to $17,670, and the Earned Income Tax Credit for qualifying taxpayers with three or more children will reach $8,231. The monthly cap for qualified transportation and parking benefits will increase to $340, while contributions to health flexible spending accounts will be limited to $3,400. 

The foreign earned income exclusion will climb to $132,900, and the fist tax exclusion remains at $19,000. The updates, though technical, reflect continued inflationary trends and the influence of recent tax legislation, including the One Big Beautiful Bill Act, which made several provisions permanent.