Standard deductions: The OBBB raised the standard deduction for tax season 2025. For married couples filing jointly, the standard deduction is $31,500. For taxpayers filing single, the standard deduction is $15,750. The standard deduction for head-of-household is $23,625. Looking ahead to 2026, the standard deduction for married couples filing jointly increases to $32,200, while those filing single see an increase to $16,100, with the head of household standard deduction rising to $24,150.
Marginal tax rates: High earners will continue to see a top marginal rate of 37 percent in 2026, applying to incomes over $640,600, or $768,700 for married couples filing jointly. The next bracket drops to 35 percent for incomes over $256,225, or $403,550 for joint filers. For single filers, income over $201,775 is taxed at 32 percent, with the rate decreasing to 24 percent at the next bracket beginning at $105,770.
Estate tax exclusions: The federal estate tax exclusion continues to rise, increasing from $13,990,000 in 2025 to $15,000,000 per taxpayer in 2026. This higher threshold allows for the transfer of additional wealth without triggering federal estate tax. Married couples may shield up to $30,000,000 combined.
Senior deduction: Changes to the senior deduction take effect in 2026, when the OBBB sunsets the provision for taxpayers 65 and older with modified gross income above $75,000, or $150,000 for joint filers. An additional deduction of $6,000 remains available from 2025 through 2028 and applies in addition to the standard deduction.
Foreign earned income exclusion: Taxpayers living or working abroad will see a modest increase in the foreign earned income exclusion, which rises from $130,000 in 2025 to $132,900 in 2026. The exclusion applies to U.S. citizens and resident aliens who meet the eligibility requirements.
These are just some of the provisions affecting the 2025 and 2026 tax seasons. As we previously discussed, the OBBB includes several measures designed to adjust tax brackets, increase deductions and reduce administrative burdens.
Taxpayers should take advantage of available opportunities while maintaining compliance. Questions about portfolio planning or audit exposure should be directed to a qualified tax professional. Additional insight about ways to avoid attention from the IRS and a possible tax audit is available in our on-target resource, "Guide to Five Ways to Avoid a Tax Audit."
When tax controversies arise, our experienced legal counsel can assist with identifying and resolving challenges with the IRS. To schedule a consultation, call 440-250-9709. We serve clients across the U.S. and internationally from offices in Cleveland and Chicago.