The 2026 tax filing season is underway, which means many taxpayers are preparing their returns. Each year, the IRS adjusts key tax provisions to account for inflation, including tax brackets, standard deductions, and contribution limits for retirement and health savings accounts.
Below is a quick overview of some of the most important updates affecting 2025 tax returns filed in 2026, so you know what may have changed before you file.
Federal tax bracket updates
The number of federal income tax brackets hasn’t changed for the 2025 tax year. There are still seven brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%). However, the IRS adjusted the income thresholds for each bracket to account for inflation.
Here’s a breakdown of the 2025 federal income tax rates and income ranges:
| Tax rate | Single filer | Married filing jointly | Married filing separately | Head of household |
| 10% | $0 to $11,925 | $0 to $23,850 | $0 to $11,925 | $0 to $17,000 |
| 12% | $11,926 to $48,475 | $23,851 to $96,950 | $11,926 to $48,475 | $17,001 to $64,850 |
| 22% | $48,476 to $103,350 | $96,951 to $206,700 | $48,476 to $103,350 | $64,851 to $103,350 |
| 24% | $103,351 to $197,300 | $206,701 to $394,600 | $103,351 to $197,300 | $103,351 to $197,300 |
| 32% | $197,301 to $250,525 | $394,601 to $501,050 | $197,301 to $250,525 | $197,301 to $250,500 |
| 35% | $250,526 to $626,350 | $501,051 to $751,600 | $250,526 to $375,800 | $250,501 to $626,350 |
| 37% | $626,351 or more | $751,601 or more | $375,801 or more | $626,351 or more |
Standard deduction increases for 2025 (taxes filed in 2026)
The standard deduction is a straightforward way to reduce your taxable income. Unlike itemized deductions, you don’t need to track and document individual expenses. The amount you can claim depends on your filing status. The IRS adjusts the standard deduction each year to account for inflation.
Here’s a breakdown of the 2025 standard deduction amounts:
- Single filers and married couples filing separately: $15,750
- Heads of household: $23,625
- Married couples filing jointly: $31,500
1099-K reporting rules
If you receive payments through platforms like PayPal, Venmo, or online marketplaces such as eBay, you may receive a Form 1099-K reporting those transactions.
For the 2025 tax year (returns filed in 2026), third-party payment platforms may issue a Form 1099-K for payments totaling $5,000 or more for goods and services. This continues the IRS transition away from the previous reporting threshold of $20,000 and 200 transactions, which applied for many years.
It’s important to remember that income has always been taxable, even if you don’t receive a 1099-K. The form simply reports payments processed through these platforms to help ensure income is properly reported on tax returns.
Contribution increases
Contribution limits for many retirement and tax-advantaged health accounts are adjusted periodically to account for inflation. These increases can give savers additional opportunities to set aside money while potentially lowering taxable income.
- 401(k) plans: You can contribute up to $23,500 to a 401(k) in 2025. If you’re 50 or older, you can make an additional $7,500 catch-up contribution.
- IRAs: The annual contribution limit for traditional and Roth IRAs remains $7,000. If you’re 50 or older, you can contribute an additional $1,000 catch-up contribution.
- Health Savings Accounts (HSAs): Individuals can contribute up to $4,300, while families can contribute up to $8,550. If you’re 55 or older, you can contribute an additional $1,000 catch-up contribution. Flexible Spending Accounts (FSAs): The annual contribution limit increased to $3,300 in 2025, up from $3,200 in 2024.
Higher alternative minimum tax (AMT) exemption for 2025 (taxes filed in 2026)
The Alternative Minimum Tax (AMT) is a separate tax calculation designed to ensure higher-income taxpayers pay a minimum level of tax, even if deductions or credits significantly reduce their regular tax liability.
The IRS adjusts AMT exemption amounts each year to account for inflation.
Here are the AMT exemption amounts and phase-out thresholds for the 2025 tax year:
- Single Filers: $88,100 (begins to phase out at $626,350).
- Married Filing Jointly: $137,000 (begins to phase out at $1,252,700).
Updated capital gains tax thresholds for 2025
Capital gains taxes apply to profits from selling assets such as stocks, bonds, real estate, or collectibles. Long-term capital gains — profits from assets held longer than one year — are taxed at different rates than ordinary income.
| Tax rate | Single | Married filing jointly | Married filing separately | Head of household |
| 0% | $0 to $48,350 | $0 to $96,700 | $0 to $48,350 | $0 to $64,750 |
| 15% | $48,351 to $533,400 | $96,701 to $600,050 | $48,351 to $300,000 | $64,751 to $566,700 |
| 20% | $533,401 or more | $600,051 or more | $300,001 or more | $566,701 or more |
Staying informed about tax law changes
These are just some of the key tax law updates affecting 2025 tax returns filed in 2026.
For a more comprehensive overview, visit IRS.gov. Staying informed about tax updates can help you avoid surprises and plan ahead. Keep in mind that state and local tax laws may differ from federal rules, and more complex tax situations may benefit from guidance from a qualified tax professional.
