Projected 2026 Tax Brackets, Rates And Deductions. Here’s What To Know.

The U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) increased by 0.4% on a seasonally adjusted basis in August and over the last 12 months, the index increased just 2.9% before the seasonal adjustment. That means that inflation is holding steady—and you’ll see the result on your tax return in 2026.

Bloomberg Tax & Accounting released its 2026 Projected U.S. Tax Rates, which reflect slightly higher numbers as compared to 2025. Those bumps will push out deduction limitations and result in upward adjustments to tax brackets and increases to other key thresholds. Throw in changes as a result of the One Big Beautiful Bill Act (OBBBA) passed in July, and your 2026 return may look a little different than before.

How does that translate to dollars? Here’s a look at the projected numbers for the tax year 2026, beginning January 1, 2026. These are not the tax rates and other numbers for 2025 (you’ll find the official 2025 tax rates here).

Tax Brackets

Here are what the rates are expected to look like in 2026.

(Remember: For filing purposes, your marital status is determined as of the last day of the tax year—December 31—according to state law. If you’re married on that day, you’re married. It’s not more complicated than that.)

Top Marginal Tax Rates

Your marginal tax rate determines what you pay when you receive the next dollar of income—it represents the highest tax rate you pay for the year. For the tax year 2026, the top federal income tax rate is 37%, plus an additional net investment income tax (NIIT) of 3.8% may apply to high-net income individuals.

Capital Gains

If you hold assets for one year or less, any capital gain at sale or disposal is considered short-term and generally taxed at your ordinary income tax rate. If you hold assets for more than one year before disposing of them, your capital gain is considered long-term and is taxed at rates of up to 20%. Exceptions apply for art, collectibles, and section 1250 gain (related to depreciation).

Capital gains rates will not change in 2026, but the brackets for the rates will change. Most taxpayers pay a maximum 15% rate, but a 20% tax rate applies to the extent that taxable income exceeds the thresholds set for the 37% ordinary tax rate. Bloomberg Tax anticipates that the maximum zero rate amounts and maximum 15% rate amounts will break down as follows:

Personal Exemption Amounts

The Tax Cuts and Jobs Act (TCJA) eliminated personal exemption amounts through 2025—that elimination was made permanent under OBBBA. Personal exemptions used to decrease your taxable income before you determined the tax due. You were generally allowed one exemption for yourself (unless you could be claimed as a dependent by another taxpayer), one exemption for your spouse if you filed a joint return, and one personal exemption for each of your dependents—that’s no longer the case.

Standard Deduction Amounts

The TCJA doubled the standard deduction amounts, but that was temporary. Under OBBBA, the increased standard deduction is made permanent.

Here’s what that will look like in 2026:

Bloomberg predicts that the standard deduction for an individual who may be claimed as a dependent by another taxpayer in 2026 will not be more than $1,350, or the sum of $450 plus the individual’s earned income.

The additional standard deduction per person for the aged or the blind will be $1,650. That amount will increase to $2,050 if the individual is unmarried and not a surviving spouse.

Additional Deduction For Seniors

Under OBBBA, seniors are eligible to claim a new, temporary deduction of $6,000 in 2026—the deduction expires in 2028. The deduction is available to taxpayers who itemize and those who claim the standard deduction. It is subject to a phase-out—phase-outs mean that the deduction is reduced as your income increases. In this case, the deduction begins to decrease once income reaches $150,000 for joint filers ($75,000 for all other taxpayers) and disappears completely once income hits $350,000 for joint filers ($175,000 for all other taxpayers). This is a stand-in for President Donald Trump’s promise of “no tax on Social Security”—there is no separate provision.

Qualifying Relative

The gross income limitation for a qualifying relative is estimated to be $5,250 in 2026 (Bloomberg notes that if the IRS rounds the inflation-adjusted amount, the cap could be $5,300.)

Kiddie Tax

Your child must pay taxes on their unearned income in 2026, but if that amount is more than $1,350 but less than $13,500, you may be able to elect to include that income on your return rather than file a separate return for your child.

Child Tax Credit

For 2026, Bloomberg predicts the amount of the child tax credit will be $2,200. The amount used to determine the amount of the child tax credit that may be refundable is projected to be $1,700.

Student Loan Interest

For 2026, Bloomberg predicts that the $2,500 maximum deduction for interest paid on qualified education loans will begin to phase out for taxpayers with modified adjusted gross income above $85,000 ($170,000 for joint returns) and will completely phase out for taxpayers with modified adjusted gross income of $100,000 or more ($200,000 or more for joint returns).

Note that these numbers are the same as 2025—they are not indexed for inflation.

Alternative Minimum Tax (AMT)

The AMT exemption rate is also subject to inflation. Bloomberg Tax anticipates that the exemption amounts will look like this in 2026:

Fringe Benefits—Transportation

In 2026, the monthly limitation for the qualified transportation fringe benefit for transportation in a commuter highway vehicle and any transit pass is $340. The monthly limitation for qualified parking is predicted to increase to $340.

The TCJA eliminated the qualified bicycle commuting expenses reimbursements exclusion through 2025. Under OBBBA, the exclusion is permanently eliminated.

Education Expenses Of Elementary And Secondary School Teachers

For 2026, Bloomberg predicts that the deduction for expenses paid by an eligible educator will be $350.

Health Savings Accounts (HSAs)

Bloomberg predicts that in 2026, the annual limitations for a self-only coverage under an HSA will be $4,400 ($8,750 for a family).

For purposes of an HSA, an HDHP is defined as a health plan that has an annual deductible of not less than $1,700 for self-only coverage ($3,400 for a family) and an out-of-pocket cap of $8,500 for self-only coverage ($17,000 for a family). Out-of-pocket expenses include deductibles, co-payments and other amounts.

Medical Savings Accounts (MSA)

Bloomberg predicts that in 2026, for purposes of an MSA, an HDHP is defined as a health plan that has an annual deductible of not less than $2,900 and not more than $4,400 for self-only coverage. The limit on out-of-pocket expenses for self-only coverage will be $5,850.

An HDHP is defined as a health plan that has an annual deductible of not less than $5,850 and not more than $8,750 for family coverage. The limit on out-of-pocket expenses for family coverage will be $10,700.

Foreign-Earned Income Exclusion

In 2026, the foreign-earned income exclusion amount is predicted to be $132,900. Remember that you can combine the exclusion with the foreign tax credit, but you cannot claim both on the same dollar of income—there’s no double dipping.

Section 199A Deduction

Sole proprietors and owners of pass-through businesses like limited liability corporations (LLCs), S corporations, and partnerships may be eligible for a deduction of up to 20% to lower the tax rate for qualified business income. The deduction is subject to threshold and phased-in amounts.

Under the TCJA, the deduction was temporary. It’s now permanent. For 2026, those amounts should look like this:

IRAs & Other Retirement Accounts

For 2026, Bloomberg predicts that the total contributions you can make to all of your traditional IRAs and Roth IRAs can’t be more than $7,500 ($8,600 if you’re age 50 or older) or your taxable compensation for the year, whichever is smaller.

For 2026, the dollar limits used to determine the deduction under section 219(g) for active participants in certain pension plans are expected to be $81,000 for single taxpayers, $129,000 for married taxpayers filing jointly, and zero dollars for married taxpayers filing separately.

Charitable Distributions

A qualified charitable distribution (QCD) allows you to roll funds directly from your IRA to a qualified charity. Those amounts can be used to satisfy your required minimum distributions (RMDs) for the year, and the amount donated is excluded from your taxable income—you won’t even have to itemize to do it. The total amount of QCDs that you can exclude from your gross income is predicted to be $111,000 in 2026.

You can make a one-time election for a QCD to a split-interest entity like a charitable trust. That amount is predicted to be $55,000 for 2026.

Roth IRAs

Taxpayers who wish to contribute to a Roth IRA are subject to phaseout amounts. (In this context, phaseouts mean that the eligible contribution amount is reduced as your income increases.)

Bloomberg predicts those will look like this in 2026:

Distribution From Retirement Plan In Case of Domestic Abuse

For 2026, the amount which can be treated as an eligible distribution from a retirement plan to a domestic violence victim cannot exceed the lesser of 1,500 or 50% of the present value of the nonforfeitable accrued benefit of the employee under the plan. (For more, see this article.)

Federal Estate Tax Exclusion

The federal estate tax exclusion for decedents dying in 2026 will increase to $15,000,000 per person or $30,000,000 per married couple.

Gift Tax Exclusion

The annual exclusion for federal gift tax purposes is predicted to be $19,000 in 2026—that’s the same as 2025. That means you can gift $19,000 per person to as many people as you want with no federal gift tax consequences in 2026; if you split gifts with your spouse, that total is $38,000.

The limit on the amount of tax-free gifts to a spouse who is not a U.S. citizen is projected to be $194,000 in 2026.

More Information

Remember that these are just projections. The IRS will publish the official tax brackets and other tax numbers for 2026 later this year, likely in October.

These numbers, however, can help you make a good start with respect to your tax planning. “Our annual projections provide tax professionals with the timely, data-driven intelligence they need to strategize effectively for the upcoming tax year well ahead of official IRS figures,” said Evan Croen, head of Bloomberg Tax & Accounting.

The full report is available here.

For the latest tax news, including changes for 2026 under OBBBA, subscribe to our free tax newsletter—that way, the information you need will land in your email inbox each Saturday morning with no additional work on your part!

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