IRS raises income thresholds and standard deductions under new law, giving modest relief to most taxpayers and prompting planning opportunities for high earners.
LOS ANGELES, Dec. 17, 2025 /PRNewswire-PRWeb/ -- The Internal Revenue Service has released the official 2026 tax brackets, confirming inflation-based increases to income thresholds and higher standard deductions under the One Big Beautiful Bill Act. Legal Tax Defense, Inc., a national law firm specializing in IRS and state tax resolution, is advising taxpayers to review how these changes will affect their paychecks and overall tax strategy heading into the new year.
The IRS will maintain the current seven tax rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — but income thresholds for each bracket are shifting upward by roughly 3% to 4%. The standard deduction will rise to $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household. Together, these adjustments are expected to reduce taxable income for most working households and provide limited relief from "bracket creep," the effect of inflation pushing taxpayers into higher rates without real income growth.
"These annual adjustments may look small, but they have a real impact on take-home pay," said Sharon Goldstein-Shapiro, spokesperson for Legal Tax Defense. "For most middle-income workers, the combination of higher thresholds and a larger standard deduction means a slightly lower effective tax rate and more breathing room in 2026."
For high earners, the top 37% rate now begins at $640,600 for single filers and $768,700 for joint filers. While that shift offers modest savings, the broader tax structure continues to emphasize planning around itemized deductions, estate exemptions, and timing of income.
The 2026 rules also make permanent several estate and wealth-transfer provisions, including a $15 million per-person federal estate and gift tax exemption indexed to inflation. Legal Tax Defense notes that this permanence creates new opportunities — and responsibilities — for taxpayers engaged in long-term financial planning.
"With the new law locking in higher exemption limits and standard deductions, now is the time to evaluate whether your withholding, deductions, or estate plans still fit your goals," Goldstein-Shapiro said. "Even modest bracket shifts can affect your refund, retirement contributions, and eligibility for certain credits."
The firm encourages taxpayers to:
- Review 2025 year-end income and adjust withholdings for 2026.
- Consider the timing of bonuses, capital gains, or deductions relative to new thresholds.
- Revisit estate and gift strategies under the updated exemption levels.
Legal Tax Defense provides consultations and legal representation for individuals and businesses seeking help with IRS compliance, back taxes, and audit response. As 2026 begins, the firm stresses that proactive tax planning is the best defense against unexpected liabilities or underpayment penalties.
"Tax season will look a little different next year," Goldstein-Shapiro said. "Understanding how these new brackets interact with your specific situation is the key to keeping more of what you earn."
For professional tax guidance or a free consultation, visit www.legaltaxdefense.com.
Media Contact
Sharon Goldstein-Shapiro, Legal Tax Defense, Inc., 1 800-804-2769, [email protected], https://www.legaltaxdefense.com
SOURCE Legal Tax Defense, Inc.
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