Overview: The Post-TCJA Fiscal Landscape
Tax Year 2026 marks a watershed moment in American tax policy. The "One, Big, Beautiful Bill Act" (OBBBA), enacted on July 4, 2025, permanently codified the Tax Cuts and Jobs Act's seven-bracket structure, eliminating the "Tax Cliff of 2025" that threatened to revert rates to pre-2018 levels.
Key Legislative Changes
- Seven-bracket progressive rate structure (10%-37%)
- Doubled standard deduction framework
- Marriage bonus structure in most brackets
- Expanded estate tax exemption ($15M)
- SALT cap increased to $40,000
- New $6,000 Senior Tax Deduction
- Child Tax Credit raised to $2,200
- Refundable CTC portion: $1,700
Single Filers Tax Brackets
For unmarried individuals who do not qualify as Surviving Spouses or Heads of Households, the 2026 tax landscape offers expanded "runways" in the lower brackets due to the 4% inflation adjustment.
| Marginal Tax Rate | Taxable Income Range | Tax Calculation |
|---|---|---|
| 10% | $0 to $12,400 | 10% of taxable income |
| 12% | $12,401 to $50,400 | $1,240 + 12% of amount over $12,400 |
| 22% | $50,401 to $105,700 | $5,800 + 22% of amount over $50,400 |
| 24% | $105,701 to $201,775 | $17,966 + 24% of amount over $105,700 |
| 32% | $201,776 to $256,225 | $41,024 + 32% of amount over $201,775 |
| 35% | $256,226 to $640,600 | $58,448 + 35% of amount over $256,225 |
| 37% | Over $640,600 | $192,979.25 + 37% of amount over $640,600 |
Married Filing Jointly & Surviving Spouses
The 2026 tax code maintains the "marriage bonus" structural integrity, where brackets for married couples are exactly double those of single filers for the majority of the income spectrum.
| Marginal Tax Rate | Taxable Income Range | Tax Calculation |
|---|---|---|
| 10% | $0 to $24,800 | 10% of taxable income |
| 12% | $24,801 to $100,800 | $2,480 + 12% of amount over $24,800 |
| 22% | $100,801 to $211,400 | $11,600 + 22% of amount over $100,800 |
| 24% | $211,401 to $403,550 | $35,932 + 24% of amount over $211,400 |
| 32% | $403,551 to $512,450 | $82,048 + 32% of amount over $403,550 |
| 35% | $512,451 to $768,700 | $116,896 + 35% of amount over $512,450 |
| 37% | Over $768,700 | $206,583.50 + 37% of amount over $768,700 |
Married Filing Separately
The Married Filing Separately status is typically used for non-tax reasons. The brackets are strictly halved from the MFJ schedule.
| Marginal Tax Rate | Taxable Income Range |
|---|---|
| 10% | $0 to $12,400 |
| 12% | $12,401 to $50,400 |
| 22% | $50,401 to $105,700 |
| 24% | $105,701 to $201,775 |
| 32% | $201,776 to $256,225 |
| 35% | $256,226 to $384,350 |
| 37% | Over $384,350 |
Head of Household
The Head of Household filing status serves as a vital fiscal support mechanism for single parents and guardians.
| Marginal Tax Rate | Taxable Income Range |
|---|---|
| 10% | $0 to $17,700 |
| 12% | $17,701 to $67,450 |
| 22% | $67,451 to $105,700 |
| 24% | $105,701 to $201,750 |
| 32% | $201,751 to $256,200 |
| 35% | $256,201 to $640,600 |
| 37% | Over $640,600 |
Estates & Trusts
The tax brackets for Estates and Non-Grantor Trusts are the most compressed in the entire code.
| Marginal Tax Rate | Taxable Income Range |
|---|---|
| 10% | $0 to $3,300 |
| 24% | $3,301 to $11,700 |
| 35% | $11,701 to $16,000 |
| 37% | Over $16,000 |
Standard Deductions
The OBBBA reinforces the structural shift toward a "standard deduction-centric" tax system.
OBBBA Senior Tax Deduction (NEW)
SALT & Itemized Deductions
The State and Local Tax (SALT) deduction cap has been raised from $10,000 to $40,000 for Tax Year 2026.
Capital Gains & Dividends
Long-term capital gains (assets held over 1 year) and qualified dividends are taxed at preferential rates of 0%, 15%, or 20%.
| Tax Rate | Single | MFJ | Head of Household |
|---|---|---|---|
| 0% | $0 – $49,450 | $0 – $98,900 | $0 – $66,200 |
| 15% | $49,451 – $545,500 | $98,901 – $613,700 | $66,201 – $579,600 |
| 20% | Over $545,500 | Over $613,700 | Over $579,600 |
Family Tax Credits
The OBBBA places heavy emphasis on family support through the tax code.
Child Tax Credit (CTC)
Earned Income Tax Credit (EITC)
| Number of Children | Maximum Credit (2026) |
|---|---|
| 3 or more children | $8,231 |
| 2 children | $7,316 |
| 1 child | $4,427 |
| No children | $665 |
Alternative Minimum Tax (AMT)
The structure of the OBBBA renders the AMT largely toothless for 99% of filers.
Estate & Gift Taxes
The OBBBA prevented the "halving" of the estate tax exemption.
Retirement Contribution Limits
Inflation adjustments continue to increase the "headroom" for tax-advantaged retirement savings in 2026.
| Account Type | 2026 Limit | Catch-Up (50+) | Super Catch-Up (60-63) |
|---|---|---|---|
| 401(k) / 403(b) / 457 | $24,500 | +$8,000 | +$11,250 |
| Traditional / Roth IRA | $7,500 | +$1,100 | N/A |
| SIMPLE IRA | $16,500 | +$3,500 | +$5,250 |
Frequently Asked Questions
The OBBBA is comprehensive tax legislation signed into law on July 4, 2025, that permanently codified the Tax Cuts and Jobs Act's seven-bracket rate structure while introducing targeted enhancements.
Congress applied 4.0% inflation adjustment to the 10% and 12% brackets, while higher brackets (22%-37%) received only 2.3%.
Taxpayers aged 65+ qualify for the $6,000 deduction. Married couples where both are 65+ can claim $12,000. It phases out above $75,000 MAGI (single) or $150,000 (MFJ).
With the SALT cap at $40,000, many taxpayers in high-tax states may benefit from itemizing. Compare your total itemized deductions against the standard deduction.
The base limit is $24,500. Age 50+ can add $8,000 catch-up. Ages 60-63 qualify for the $11,250 super catch-up, allowing up to $35,750 total.