The IRS recently released the 2026 cost-of-living adjustments that affect more than 60 tax provisions, many of which were made permanent or modified by the One Big Beautiful Bill Act and the Tax Cuts and Jobs Act.
These adjustments mirror inflation and ensure thresholds for tax brackets, deductions, credits, and exemptions keep up with rising costs, advises DunlapSLK, a CPA and business advisory firm based in Chalfont.
For individuals, tax-bracket thresholds will increase for each filing status. The standard deduction will also increase: in 2026, it’s set at $32,200 for married filing jointly, $24,150 for heads of households, and $16,100 for single/married separate filers.
On long-term capital gains, the zero percent, 15 percent, and 20 percent rate brackets shift upward as well: for singles, the zero percent bracket goes up to $49,450, the 15 percent to $545,500, and the 20 percent applies above that. Similar adjustments apply for heads of households and married filers.
The alternative minimum tax (AMT) is also impacted: its brackets are indexed for inflation, and the AMT exemption amounts grow (to $90,100 for singles and heads of households, $140,200 for joint filers). But beginning in 2026, the phase-out range for the AMT exemption shrinks significantly (to $500,000-$680,200 for singles, $1,000,000-$1,280,400 for joint) compared to 2025.
Child-related tax benefits are likewise addressed. The child tax credit remains at $2,200 per qualifying child for 2026 (with the refundable portion at $1,700). The adoption credit increases to $17,670, with a refundable portion of $5,120.
For gift and estate taxes, the unified exemption is permanently set at $15 million and will continue to be indexed for inflation, while the annual gift-tax exclusion remains at $19,000 per giver per recipient.
These inflation-based floating thresholds present planning opportunities for many taxpayers, but they also highlight increased AMT risk for some. With year-end planning underway, now is the time to review your situation in light of the 2026 figures.
Learn more about the 2026 cost-of-living adjustments from DunlapSLK.
