In a sweeping change that could impact millions of Americans, the federal government’s decision to roll back certain 2017 tax cuts in 2026 means that **new IRS tax brackets** are on the horizon. This shift marks a return to pre-2017 tax structures, reshaping how much individuals and households pay in federal income taxes. For most taxpayers, this will result in higher tax rates and altered deduction rules, triggering a significant need for financial planning.
The 2017 Tax Cuts and Jobs Act (TCJA) brought lower tax rates and doubled the standard deduction, but many of these changes were temporary and are set to expire after December 31, 2025. As we approach 2026, tax advisors, financial planners, and everyday taxpayers must prepare for the looming return of prior tax policies. Key elements such as **tax brackets, deductions, and estate exemption limits** are expected to revert, potentially affecting everything from your paycheck to your long-term estate planning strategy.
Overview of the 2026 IRS Tax Bracket Changes
| Category | 2018–2025 (TCJA Rules) | 2026 Onward (Expected Changes) |
|---|---|---|
| Top Individual Tax Rate | 37% | 39.6% |
| Number of Tax Brackets | 7 | Likely to remain at 7, but adjusted brackets |
| Standard Deduction | $13,850 (Single); $27,700 (Married) | Expected reduction nearly by half |
| Personal Exemptions | Eliminated | Expected to be reinstated |
| Child Tax Credit | Up to $2,000 per child | May drop to $1,000 per child |
| Estate and Gift Tax Exemptions | Over $12.9 million (2023) | Estimated to be cut in half |
What changed in 2017 and why it matters now
The Tax Cuts and Jobs Act (TCJA) implemented sweeping reforms intended to stimulate economic growth and simplify filing. The law slashed income tax rates across nearly all brackets and doubled the standard deduction—changes that resulted in many households paying less in taxes. These provisions, however, were temporary for individual taxpayers and are due to sunset at the end of 2025 unless Congress enacts new legislation to extend them.
Beginning in 2026, **taxpayers will likely face higher income tax rates**, lower standard deductions, reversion of personal exemptions, and reduced credits. These adjustments may cause substantial tax increases for middle-class earners unless mitigated by proactive financial planning. The revival of previous rules could also complicate tax filings, especially for those navigating multiple income sources, retirement intelligence, or charitable contributions.
Projected 2026 tax brackets for individuals and joint filers
Under the pre-TCJA system that is expected to return, the top marginal rate increases from 37% back to 39.6%, and other brackets shift accordingly. Here’s an estimate of where 2026 tax brackets may fall, adjusted for expected inflation:
| Tax Rate | Income (Single) | Income (Married Filing Jointly) |
|---|---|---|
| 10% | Up to $11,000 | Up to $22,000 |
| 15% | $11,001 – $44,725 | $22,001 – $89,450 |
| 25% | $44,726 – $95,375 | $89,451 – $190,750 |
| 28% | $95,376 – $182,100 | $190,751 – $364,200 |
| 33% | $182,101 – $231,250 | $364,201 – $462,500 |
| 35% | $231,251 – $578,125 | $462,501 – $693,750 |
| 39.6% | Over $578,125 | Over $693,750 |
“Taxpayers should start modeling their 2026 scenarios now, especially those close to income thresholds where bracket creep can have an impact.”
— Jane Goldstein, Certified Public Accountant
Who will be affected and how
The return to the previous tax code will broadly affect most taxpayers, but the degree of impact will vary. Here’s a glance at which groups stand to benefit or lose under the 2026 changes:
| Group | Winners | Losers |
|---|---|---|
| Low-Income Earners | May benefit from reinstated personal exemptions | Reduced standard deduction could offset gain |
| Middle-Class Families | Possible increase in personal exemption | Lower child tax credit and higher brackets |
| High-Income Households | Minimal, if any, benefits | Will likely pay more due to higher top rates |
| Estate Planners | Opportunity to act before 2026 | Exemption cut could trigger estate tax burdens |
“High-net-worth individuals should take immediate action to lock in current estate exemptions before the rollback occurs.”
— Michael Cheng, Tax Attorney
Strategies to prepare for the 2026 tax bracket shift
The 2026 tax bracket reset is more than a numerical change—it’s a significant moment requiring strategic financial decisions. Individuals and families can take several proactive steps:
- Accelerate income while lower tax brackets still apply in 2024 and 2025
- Use Roth conversions in lower brackets to reduce future taxable income
- Maximize deductions before they potentially shrink
- Gift assets ahead of estate tax exemption reductions
- Meet with financial and tax advisors by end of 2024 to assess options
“Planning ahead isn’t optional anymore—it’s essential. The tools and tactics must evolve as the tax rules do.”
— Rebecca Huang, Certified Financial Planner
Estate and gift taxes are also changing
The TCJA significantly raised the estate and gift tax exemption, which stood at over $12.9 million per person in 2023. But come 2026, this exemption is projected to drop to roughly $6.8 million per individual—or $13.6 million for married couples. This will pull many more estates into the taxable category.
Those with assets near or above these levels need to consider irrevocable trusts, charitable contributions, and gifting strategies. Taking steps now can help avoid burdensome estate taxes down the road.
Potential Congressional actions to watch
It remains uncertain whether Congress will allow the TCJA provisions to expire or pass new legislation to extend or modify them. The political landscape post-2024 elections could heavily influence the direction of these tax laws. If no action is taken, the rollback will take effect automatically.
“It’s a waiting game, but one we can’t afford to lose. Business owners especially should use this time to reassess ownership structures and profit planning.”
— Alan Rodriguez, Small Business Tax Consultant
Short FAQs on 2026 IRS tax bracket changes
Will the standard deduction be reduced in 2026?
Yes. The TCJA’s higher standard deductions are set to expire after 2025, likely causing the deduction to return to pre-2018 levels—about half the current amount.
Is the top tax bracket going up?
Yes. The top marginal tax rate is expected to increase from 37% to 39.6%, moving more high earners into the highest paying category.
What happens to personal exemptions in 2026?
The personal exemption, which was eliminated under TCJA, is scheduled to return in 2026. This could help decrease taxable income for many.
Will the child tax credit decrease?
Yes. The child tax credit is expected to reduce from $2,000 per qualifying child to around $1,000 unless new legislation is passed.
How will this impact estate planning?
Estate and gift tax exemptions will likely drop by half, meaning more estates could be subject to federal estate tax. Early planning is advised.
Can I still take advantage of current 2025 tax rates?
Absolutely. Now is the time to speak with a tax professional to lock in favorable rates before the laws revert in 2026.
Should retirees be concerned about these changes?
Yes. Retirees may face higher taxes on Social Security income, pensions, and required minimum distributions due to tighter brackets and deduction rules.
Are there any updates expected before 2026?
Congress may take action to extend or alter the 2017 tax cuts, but as of now, the reversion is set to occur automatically after 2025.
About the Author
