The Internal Revenue Service (IRS) has announced new tax rates and standard deductions for 2026, adjusted for inflation by various CPI gauges.

The new tax rates for income earned in 2026 are:

  • 10% for joint filers with incomes of $24,800 or less ($12,400 or less for single filers);
  • 12% for joint filers with incomes over $24,800 ($12,400 for single filers);
  • 22% for joint filers with incomes over $100,800 ($50,400 for single filers);
  • 24% for joint filers with incomes over $211,400 ($105,700 for single filers);
  • 32% for joint filers with incomes over $403,550 ($201,775 for single filers);
  • 35% for married couples filing jointly with incomes over $512,450 ($256,225 for single filers); and
  • 37% for joint filers with incomes over $768,700 ($640,600 for single filers).

The 2026 standard deduction is:

  • $32,200 for joint filers, up from $31,500 in 2025;
  • $24,150 for heads of households, up from $23,625 in 2025; and
  • $16,100 for individual filers, up from $15,750 in 2025.

Tax brackets for Capital Gains tax have also increased to:

  • 0% for joint filers with incomes up to $98,900 ($49,450 for single filers);
  • 15% for joint filers with incomes over $98,900 and up to $613,700 (over $49,450 and up to $454,500 for single filers); and
  • 20% for joint filers with incomes over $613,700 ($454,500 for single filers).

The alternative minimum tax (AMT) is a supplemental income tax targeting high-income earners who strategically have a high ratio of standard income tax (SIT) deductions.

The AMT exemption amount has increased to $140,200 for joint filers ($90,100 for single filers). The phaseout threshold beyond which taxpayers are no longer eligible for the AMT exemption is $1,000,000 for joint filers ($500,000 for single filers).

Some relief — but the bracket creep continues

Critically , the 2018 tax overhaul tied tax bracket adjustments to the chained consumer price index (CPI). This CPI index rises more slowly than the traditional CPI measure for the price of consumer goods you actually buy.

In turn, tax brackets rise more slowly than the consumer inflation everyone experiences as retail buyers — and one’s increase in earnings. This means, whether or not your household income rises, you are shifted more quickly into higher tax brackets (and rates) than under the old measure which kept brackets more in line with rises in inflation and personal incomes to keep the standard of living from declining.

By design, you as a taxpayer annually suffer from rate adjustment mathematics, more generally termed bracket creep. The rate of tax automatically moves you up into a higher tax bracket despite your receiving no real increase in the amount of your income (read: after deducting the annual consumer-goods price inflation from your current income).

Meanwhile, the government’s take increases at a faster clip than inflation. True, your income may have increased in total dollar amount from the previous year, but maybe not enough to actually match or increase your purchasing power from the prior year. But your taxes increased more than the rate of inflation.

This occurs when consumer inflation exceeds the percentage increase in your after-tax income. Here, the math is due to the CPI index IRS uses not equaling or exceeding consumer price inflation you experience as a taxpayer. So, you end up a bit poorer than in the prior year.

However, real estate licensees continue to adjust to the major income adjustments induced by reduced sales volume and stifled-to-dropping home prices, amounting to significant losses in income across the industry — before and after income taxes.

As a result, bracket creep may not actually be an issue for most agents in 2026, as they continue to adjust to flat or reduced income. Look ahead to around 2028 for bracket creep to become a real issue once again. Then, the housing market will enter its next sustainable expansion, as will the proportion of income paid for taxes compared to prior years.