Tax. The actual 2026 rules.
Federal and state tax content for tax year 2026 — updated for every provision of the One Big Beautiful Bill Act, sourced from IRS Revenue Procedure 2025-32, and reviewed by CPAs and Enrolled Agents before publication.
The 2026 tax cliff didn’t happen.
Signed July 4, 2025, the OBBBA made the TCJA tax structure permanent — and added four entirely new above-the-line deductions on top of it. Here’s what changed for tax year 2026 onward.
TCJA brackets locked in
The seven-bracket structure — 10%, 12%, 22%, 24%, 32%, 35%, 37% — is now permanent. The feared return to 39.6% top rate isn’t happening. Brackets keep their annual inflation indexing.
Larger standard deduction
Permanent at TCJA-enhanced levels: $16,100 single / $32,200 MFJ / $24,150 HoH for 2026. The shift from itemizing to taking the standard deduction sticks.
CTC raised to $2,200
Child Tax Credit went from $2,000 to $2,200 per qualifying child, made permanent and indexed to inflation. Phase-out unchanged at $200K single / $400K MFJ MAGI.
No tax on tips
New above-the-line deduction for up to $25,000 of qualified tip income, phasing out at MAGI $150K single / $300K MFJ. Covers W-2 and 1099 tip earners in IRS-listed customarily-tipped occupations.
No tax on overtime
Above-the-line deduction for FLSA-qualifying overtime premium pay — up to $12,500 single / $25,000 MFJ. Same MAGI phase-out as tips ($150K / $300K).
Senior $6,000 deduction
Taxpayers 65+ get an additional $6,000 deduction ($12,000 for joint) — stackable with the existing senior standard deduction. Phases out at $75K single / $150K MFJ MAGI.
Auto loan interest deductible
Up to $10,000 in interest on new personal-use vehicle loans is deductible above-the-line. Limited to qualifying domestic-assembly vehicles per the bill’s specs.
SALT cap raised to ~$40,400
The State and Local Tax deduction cap went from $10,000 to about $40,400 for 2026, with ~1% annual raises through 2029. Phases out for MAGI over $500K. Reverts to $10,000 in 2030 unless extended.
Estate exemption at $15M
Estate and gift tax exemption raised to $15,000,000 per person and made permanent, indexed to inflation going forward. Removes the prior 2026 reversion risk that drove a lot of estate-planning urgency.
The reference numbers for tax year 2026.
Direct from IRS Revenue Procedure 2025-32 (released October 9, 2025) plus IRS Notice 2025-67 for retirement-plan limits. These apply to income earned in 2026 and reported on returns filed in 2027.
| Bracket | Single | MFJ |
|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 |
| 12% | $12,400 – $50,400 | $24,800 – $100,800 |
| 22% | $50,400 – $105,700 | $100,800 – $211,400 |
| 24% | $105,700 – $201,775 | $211,400 – $403,550 |
| 32% | $201,775 – $256,225 | $403,550 – $512,450 |
| 35% | $256,225 – $640,600 | $512,450 – $768,700 |
| 37% | $640,600+ | $768,700+ |
Tax year 2025 = income earned in 2025, return filed by April 15, 2026. Tax year 2026 = income earned in 2026, return filed by April 15, 2027. The numbers above apply to tax year 2026. For your 2025 return, the standard deduction is $15,750 single / $31,500 MFJ — those are also OBBBA-raised figures, but lower than the 2026 amounts. Side-by-side comparison →
All the things “tax” can actually mean.
Tax is wide. These are the six categories the rest of this pillar is organized into — each with deep guides and the calculators that go with them.
How federal income tax works
What gets pulled before the bill arrives
The things that actually reduce the bill
Tax on what you sell, not what you earn
When the basic case doesn’t apply
When it’s time to actually file
Run the numbers.
Eight most-used tax calculators on the site. All updated for tax year 2026 figures — including the new OBBBA deductions where they apply. The full set of 125 calculators is on the calculator hub.
The dates that actually matter.
Federal tax deadlines for the 2026 calendar year. State deadlines mostly mirror federal, but a handful don’t — check the state deadline table if you live in a state that doesn’t.
The other tax that matters.
Federal tax is one half of the bill. State tax is the other — with 51 different rule sets, nine states with no income tax, and a handful where local payroll taxes pile on top.
Pick your state. The calculator handles the rest.
Every state has a dedicated page with current-year bracket math, paycheck calculator, capital-gains conformity rules (or non-conformity), and any local taxes that apply. Nine states have no state income tax — those pages cover what to know about property and sales tax instead.
The questions readers keep asking.
If your question isn’t here, the contact form takes editorial questions — and we publish recurring ones as their own articles.
Did the 2026 tax cliff actually happen?
No. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made the TCJA tax structure permanent. Tax rates stay at 10/12/22/24/32/35/37 — the feared return to the pre-TCJA top rate of 39.6% isn’t happening.
The standard deduction also stays at TCJA-enhanced levels and is now permanent. Estate tax exemption was raised to $15M and made permanent. Personal exemptions remain at $0. Most of the worry that built up around the 2026 expiration was resolved by OBBBA.
How does the “no tax on tips” deduction actually work?
It’s an above-the-line deduction on the new Schedule 1-A — meaning it reduces your AGI directly, and you can claim it whether you itemize or take the standard deduction. Maximum deduction is $25,000 of qualified tip income, phasing out at MAGI over $150,000 single / $300,000 MFJ.
“Qualified” means the tips have to be received in an occupation the IRS lists as customarily and regularly receiving tips (the list as of December 31, 2024 governs). The income has to be reported — W-2 tips, 1099 tips, or Form 4137 self-reported tips all count. Effective tax years 2025 through 2028. Read the full guide at OBBBA new deductions.
What’s the SALT cap for 2026?
About $40,400 for 2026 — a roughly 4× increase from the prior $10,000 cap. The cap rises about 1% per year through 2029. It reverts to $10,000 in 2030 unless Congress extends it again. Phases out for MAGI over $500,000.
Big practical effect: many households in high-tax states (NY, NJ, CA, MA, CT, IL) will now itemize where they previously took the standard deduction. The full decision tree walks through the math.
Why am I getting a bigger refund this year?
If you filed your 2025 return and got a larger refund than usual, you’re not alone — OBBBA reduced 2025 individual income taxes by an estimated $129 billion. The new tip, overtime, and senior deductions apply retroactively to 2025, the standard deduction was raised, and the CTC went up to $2,200/child.
The flip side: payroll withholding hadn’t caught up to OBBBA when most of 2025’s tax was withheld, so the over-withheld amount comes back as a bigger refund. For 2026, withholding tables now reflect OBBBA, so the refund “bonus” should normalize.
Should I file my own taxes or hire a CPA?
Honest answer: it depends on your situation, not your income level. Some $300K W-2 earners with no investments can file in 20 minutes with free software. Some $80K self-employed people with multi-state work and depreciable equipment need a CPA.
The break-even points: a CPA usually pays for themselves once you have rental property, K-1 income, multi-state filing, foreign income, significant capital gains, or complex retirement-account moves. The DIY vs CPA decision tree walks through the specific triggers.
What’s the difference between tax year 2025 and tax year 2026 on this site?
Tax year 2025 = income earned during the 2025 calendar year, return filed by April 15, 2026. Tax year 2026 = income earned during the 2026 calendar year, return filed by April 15, 2027.
The figures shown across this pillar default to tax year 2026 (because that’s the current year). Where you’re filing a 2025 return, the numbers are different — both standard deduction and brackets shifted between 2025 and 2026 due to inflation indexing. The side-by-side reference has both years.
How do I adjust my W-4 if I’m getting too big a refund (or owing too much)?
The post-2020 W-4 is different from the old one — it asks for dollar amounts rather than allowances. The fastest way to land near zero refund is the IRS Tax Withholding Estimator at irs.gov, or our W-4 optimizer which adds OBBBA deductions to the calculation.
Rule of thumb: a large refund is an interest-free loan to the government. Aim for a refund (or balance due) under $500. Anything bigger and your money is sitting somewhere it could’ve been earning yield in your savings or paying down high-interest debt.
Tax overlaps with everything else.
These four pillars have the strongest tax-content overlap with this one — covered by our editorial team but pointing to the same federal-source figures.