The IRS has released its annual inflation adjustments for 2026, which will determine how much taxpayers owe when they file their returns in April 2027.

The new brackets increase by about 2.7% over the prior year, according to the Tax Foundation, meaning some households may see lower tax bills even if their income rises slightly. 

If you earn the same amount in 2026 as you did in 2025, your taxes could go down. For example, an individual earning $100,000 in 2026 will owe approximately $13,170 in federal income tax, about $279 less than last year, according to NBC News.

“We call it ‘bracket creep’—where you would end up going into a higher tax. Bracket if they didn’t end up being adjusted for inflation,” said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals. These annual adjustments prevent that shift by ensuring nominal increases in income don’t push taxpayers into higher brackets without an actual gain in buying power. 

The standard deduction is also increasing by 7.3% for all filers. For 2026, the deduction will rise to $32,200 for married couples filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household. 

The IRS released the new figures this month despite an ongoing government shutdown that has furloughed half of its staff. Treasury layoffs earlier this month reportedly affected the agency’s human resources and IT operations.