Despite a government shutdown, Americans have been given a glimpse into where they’ll stand when Tax Day 2026 rolls around. The IRS recently published its 2026 tax brackets and adjusted standard deductions. The changes align with inflationary shifts and new tweaks from the recently passed One Big Beautiful Bill Act (OBBBA). As taxpayers digest the updates, some will see moderate savings, while others may find their tax planning landscape altered.

The announcement breaks recent norms. Typically, detailed tax tables emerge closer to the filing season. But with major structural changes on the horizon, the IRS and lawmakers appear intent on giving people ample notice. For households, anticipation is high: who benefits, who doesn’t, and what surprises lie in the fine print?

What Changed: Brackets, Deductions & Rates

The seven marginal tax brackets have been nudged upward by about 2%, a relatively modest inflation correction compared to the sharper adjustments seen during the height of inflation. For context, bracket shifts were closer to 7% in 2023 and 5% in 2024. The OBBBA locks in current marginal tax rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) permanently, which will avert rate increases for roughly 2/3 of taxpayers.

In addition to bracket adjustments, standard deductions are also rising. For 2026, the deduction increases to $16,100 for individuals and $32,200 for married couples filing jointly. That’s up from $15,750 and $31,500 under the 2025 figures.

There are also improved provisions for seniors (taxpayers 65 and older), as well as those who are blind. Under the new tax code, there is a $6,000 “senior bonus deduction” that will be in place through 2028.

One of the more noticeable changes: the state and local tax (SALT) deduction cap jumps from $10,000 to $40,000 through 2029. There are also some tweaks that provide deductions or credits for overtime workers and people who buy cars assembled in the United States. However, many of those benefits phase out at higher income levels.

Who Gains and Who Stays Flat

Taxpayers who land in the middle brackets may see some modest breathing room. “Bracket creep,” which happens when inflation pushes income into higher brackets even without real gains, should be mitigated, at least somewhat. Locking in rates also prevents rate hikes for many taxpayers, making this particularly beneficial for middle-income Americans.

For filers already near the top marginal brackets, the 2% adjustment offers limited relief. The bigger advantage may come from deductions like expanded SALT or bonus deductions, but only if they can qualify under income thresholds.

Seniors, dependents, and those who are blind stand to benefit the most from the new tax code. With layered deductions, which include provisions based on base income, age, blindness, and the senior bonus, eligible taxpayers may significantly reduce their taxable income. For married seniors, the cumulative deduction increases stand to be some of the most substantial that we’ve seen in years.

Residents in states with heavy property or income taxes, like New York, New Jersey, and California, may particularly benefit from the boosted SALT ceiling. For some, itemizing may once again beat standard deductions.

What It Means for Small Businesses and Self-Employed Workers

The 2026 tax adjustments don’t just affect individual filers, but could also impact how small business owners and freelance workers plan for the upcoming tax season. While corporate tax rates remain unchanged under the OBBBA, pass-through entities like sole proprietorships, LLCs, and S corporations will feel the ripple effects of inflation adjustments and deduction changes.

Unpacking the Risks & Limitations

While these changes look promising for millions of Americans, it’s important to remember that there are always some caveats to keep in mind. The 2% bracket shifts are modest, meaning many taxpayers will see only incremental benefit. Some of the new deductions carry income caps and phaseouts, meaning higher earners may derive little to no advantage.

Also, the permanence of the current rates comes at a cost. Analyses suggest extending the 2017-era rates indefinitely will add trillions to the federal deficit over the next decade. This creates the potential for future tax codes to be far less forgiving. There’s also a chance that the ongoing government shutdown may delay IRS operations. This could impact the publication of final forms and slow down service during the 2026 filing season.

Planning Moves Before 2026

With these changes in view, taxpayers and advisors should consider some proactive steps. Reviewing contribution strategies, such as pre-tax vs. Roth, maximizing deductions before phaseouts, and timing income shifts could prove more critical than ever. Some experts suggest accelerating or deferring income to remain within favorable bracket margins.

Those considering itemizing should reevaluate whether SALT increases or charitable contributions shift the balance. For seniors, coordinating age/blindness deductions with the new bonus will be as important as ever.

A Look into the Future

These 2026 tax changes mark a new chapter in U.S. fiscal policy. Locking in current rates, expanding deductions, and adjusting thresholds reflect a shift toward permanence in tax law. But the benefits will vary widely across demographics.

In the months ahead, the IRS must finalize forms and guidance. Treasury and Congress may still propose tweaks or adjustments, but you shouldn’t expect any sort of headway until the government shutdown ends. The true impact, especially when it comes to planning, consumer behavior, and revenue projections, will unfold over the coming tax cycles.