How Recent IRS Changes Will Impact Your Taxes This Year and Next: What You Need to Know

The IRS has recently revealed changes affecting your federal tax return for this year and the next. These updates are mainly influenced by inflation and new tax laws from July.

How these changes impact you depends on the deductions you take and your taxable income. Generally, many taxpayers might experience slight relief since deductions and thresholds are increasing. Tom O’Saben, a tax expert from the National Association of Tax Professionals, notes that inflation will become less of a burden for many people.

One significant change is the increase in the standard deduction. Most people opt for this because it usually offers more savings than itemizing deductions. By 2026, the IRS expects the standard deduction to rise. For the 2025 tax year, singles will see a deduction of $15,750, up from $15,000. Couples filing jointly will benefit from a jump to $31,500, while heads of households will receive $23,625, up from $22,500.

There will be more adjustments for inflation in 2026. For that tax year, the standard deduction will reach $16,100 for singles, $32,200 for joint filers, and $24,150 for heads of households. This means more income will fall into a “zero bracket” where it won’t be taxed.

The IRS is also updating income ranges for the federal tax rates next year. As they explain, if your income moves to a higher bracket, you only pay the higher rate on the amount that exceeds the limit of that bracket.

Interestingly, the increase in income ranges isn’t consistent. Some saw an increase of about 3.9%, while others rose by only 2.3%. O’Saben points out that this inconsistency comes from the IRS’s adjustment methods, not from any policy bias.

Here’s what the tax rates will look like for 2026:

• 10%: On the first $12,400 of taxable income ($24,800 for joint filers).
• 12%: On income over $12,400 ($24,800 for joint filers).
• 22%: On income over $50,400 ($100,800 for joint filers).
• 24%: On income over $105,700 ($211,400 for joint filers).
• 32%: On income over $201,775 ($403,550 for joint filers).
• 35%: On income over $256,225 ($512,450 for joint filers).
• 37%: On income greater than $640,600 ($768,700 for joint filers).

Another notable feature is the Earned Income Tax Credit (EITC). This credit is extremely beneficial for low-income families. It’s a dollar-for-dollar reduction in your taxes. If you owe little or no tax, it can boost your refund. The maximum EITC for families with three or more children will rise to $8,231 in the coming year, up from $8,046.

For more detailed information about these changes, you can visit the IRS [here](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill).

As tax season approaches, it’s essential to stay informed about these adjustments. Knowing how they affect your situation can help you navigate your finances better.

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