What Tax Pros Need to Know
The IRS recently published Revenue Procedure 2025-32, detailing inflation-adjusted amounts and updates under the One Big Beautiful Bill (OBBB) that will apply for tax year 2026 (returns filed in 2027). These changes affect key thresholds, deductions, credits, and limits, and tax professionals must be ready to account for them.
Here are the most relevant updates you should be aware of:
1. Standard Deduction Rises
- Married filing jointly: $32,200
- Single / Married filing separately: $16,100
- Head of household: $24,150
These increases reflect significant boosts over 2025’s levels of $31,500 / $15,750 / $23,625, respectively.
2. Marginal Tax Rates & Brackets
The top marginal rate remains 37% for singles with income above $640,600 (or $768,700 for joint filers). Other brackets are also adjusted upward across all levels — for example, the 24% bracket now begins at $105,700 (or $211,400 for married couples filing jointly).
1. Standard Deduction Rises
- Married filing jointly: $32,200
- Single / Married filing separately: $16,100
- Head of household: $24,150
These increases reflect significant boosts over 2025’s levels of $31,500 / $15,750 / $23,625, respectively.
2. Marginal Tax Rates & Brackets
The top marginal rate remains 37% for singles with income above $640,600 (or $768,700 for joint filers). Other brackets are also adjusted upward across all levels — for example, the 24% bracket now begins at $105,700 (or $211,400 for married couples filing jointly).
3. Key Exemptions, Credits & Limits
- AMT Exemption: Unmarried individuals: $90,100 (phases out starting at $500,000). Married/joint: exemption phases begin at $1,000,000.
- Estate Tax Exclusion: $15,000,000 per decedent in 2026 (rising from $13,990,000 in 2025).
- Adoption Credit: Up to $17,670 with $5,120 potentially refundable.
- Employer Childcare Credit: Maximum credit raised to $500,000 (or $600,000 for eligible small businesses).
- EITC (Earned Income Tax Credit): Maximum increases to $8,231 for those with 3+ qualifying children (from $8,046).
- Qualified Transportation & Parking Fringe Benefits: Monthly limit increased to $340.
- Health FSAs & Medical Savings Accounts: Contribution, deductible, and out-of-pocket limits increase modestly.
- Foreign Earned Income Exclusion: Increased to $132,900.
- Gift Exclusion: Remains at $19,000, though the limit for non-citizen spouse gifts rises to $194,000.
3. Key Exemptions, Credits & Limits
- AMT Exemption: Unmarried individuals: $90,100 (phases out starting at $500,000). Married/joint: exemption phases begin at $1,000,000.
- Estate Tax Exclusion: $15,000,000 per decedent in 2026 (rising from $13,990,000 in 2025).
- Adoption Credit: Up to $17,670 with $5,120 potentially refundable.
- Employer Childcare Credit: Maximum credit raised to $500,000 (or $600,000 for eligible small businesses).
- EITC (Earned Income Tax Credit): Maximum increases to $8,231 for those with 3+ qualifying children (from $8,046).
- Qualified Transportation & Parking Fringe Benefits: Monthly limit increased to $340.
- Health FSAs & Medical Savings Accounts: Contribution, deductible, and out-of-pocket limits increase modestly.
- Foreign Earned Income Exclusion: Increased to $132,900.
- Gift Exclusion: Remains at $19,000, though the limit for non-citizen spouse gifts rises to $194,000.
What Doesn’t Change
- Certain items remain constant despite inflation indexing:
- Personal exemptions remain eliminated.
- Itemized deduction limitations under OBBB remain as currently structured.
- The Lifetime Learning Credit’s phase-out thresholds are unchanged for now.
Why These Adjustments Matter for Your Practice
As a tax professional, being ahead of these updates ensures accuracy and client confidence. Misapplying old thresholds can lead to under-or overpayment, audit risks, and reputational damage. Integrating these new numbers into your software, client worksheets, and tax planning packages from day one sets you apart as an informed advisor.
At Swift Financial Partners, SFPWorks will already incorporate these inflation adjustments automatically when tax year 2026 returns are launched — so your team can focus on strategy, not manual updates.
Next Steps for Tax Pros
Review how these changes impact your most common client types (individuals, married, head of household).
Update your internal cheat sheets and tax planning tools.
Use SFPWorks’ upcoming 2026 version (with built-in updated parameters) to streamline filing and advising.
Schedule a free demo of SFPWorks TODAY!
If you’re still searching for reliable e-file software to power your tax business, there’s still time to get onboarded with SFPWorks — the #1 cloud-based e-file platform trusted by thousands of tax professionals nationwide. Join today and experience faster filings, seamless updates, and unmatched support built specifically for preparers like you.
Schedule a free demo of SFPWorks TODAY!
If you’re still searching for reliable e-file software to power your tax business, there’s still time to get onboarded with SFPWorks — the #1 cloud-based e-file platform trusted by thousands of tax professionals nationwide. Join today and experience faster filings, seamless updates, and unmatched support built specifically for preparers like you.
Before you can file returns, you need an EFIN (Electronic Filing Identification Number) from the IRS. The application can feel overwhelming—but we make it easy.
Our team provides step-by-step, one-on-one guidance to help you get approved fast—at no cost to you. With our Free EFIN program, you’ll be ready to e-file with confidence this tax season.
Get your Free EFIN Assistance here.
Before you can file returns, you need an EFIN (Electronic Filing Identification Number) from the IRS. The application can feel overwhelming—but we make it easy.
Our team provides step-by-step, one-on-one guidance to help you get approved fast—at no cost to you. With our Free EFIN program, you’ll be ready to e-file with confidence this tax season.
