[Updated with IRS Adjustments and Trump Tax Bill] Per the federal tax code the IRS is required to adjust dozens of tax related items for inflation on an annual basis.
Given the persistently high levels inflation as evidenced in the recent COLA increases, the IRS has again announced significant increases to federal tax bracket ranges and standard deductions for the coming year. This was further boosted for 2025 and 2026 in Trump’s recently enacted OBBB. There was no change to the actual tax rates.
Standard Deductions by Filing Status
The standard deduction is a flat amount that allows taxpayers to reduce their taxable income (AGI), which could put them in a lower income tax bracket. Those who claim the standard deduction in their tax return cannot itemize to claim a broader range of deductions, or vice-versa.
The latest standard deduction by filing status and tax year is shown in the table below. Nearly 70% of tax payers claim the standard deduction when filing their return. The IRS adjusts standard deduction amounts annually for inflation, so these numbers will change annually.
Get your biggest tax refund, guaranteed. Get started today.
| Filing Status | 2026 SD | 2025 SD | 2024 SD | 2023 SD |
|---|---|---|---|---|
| Married Filing Jointly / Surviving Spouses | $32,000 | $31,500 | $29,200 | $27,700 |
| Heads of Household | $24,000 | $23,625 | $21,900 | $20,800 |
| Single / Unmarried Individuals | $16,100 | $15,750 | $14.600 | $13,850 |
| Married Individuals Filing Separately | $16,100 | $15,750 | $14.600 | $13,850 |
Because the US tax system is a progressive one, as standard deductions and tax bracket ranges expand more of your current income is taxed in a lower bracket.
Hence the latest increase in standard deductions should be especially helpful to lower and middle-income taxpayers who often get hit by tax bracket creep when they see flat or higher incomes – which should be the case given average wages are expected to increase by a similar amount in the next 12 months.
Get the latest money, tax and stimulus news directly in your inbox
The above changes will act like an automatic tax cut for many W2 workers and should result in larger (take home) paychecks, after the IRS and payroll providers update paycheck-withholding calculations, which will result in less money being withheld for taxes.
Naturally if you get big raise or bonus next year, your taxes may go up due to you higher overall gross/taxable income. But your current or existing wages should be taxed less.
The tax related adjustment will happen automatically for most active employees but if your life situation (marriage, divorce or kids) or employer changes you may want to submit a new or updated IRS W4 form to your HR/Payroll department.
Because of higher than average inflation any pay raise in real terms will be quickly eaten up the higher cost of goods and services, making the gain from higher tax brackets and standard deduction savings even more important to millions of Americans in the coming years.
Senior Citizen Standard Deduction Updates
Certain senior (older than 65) taxpayers may qualify for additional standard deductions enacted as part of new legislation. This includes:
- For those age 65 or older or blind:
- Single or Head of Household: $2,000
- Married Filing Separately or Jointly: $1,600 per qualifying individual
- A new bonus deduction under the Trump OBBB for those age 65 and older:
- This is a temporary deduction of up to $6,000 (or $12,000 for married couples if both spouses qualify) available from 2025 through 2028.
- Eligibility for the full bonus deduction is capped at a modified adjusted gross income (MAGI) of $75,000 for single filers and $150,000 for joint filers, phasing out above these limits.
For example, a single taxpayer age 65 or older (or who is blind) can claim a total standard deduction of $17,750 ($15,750 standard deduction + $2,000 additional deduction) on their 2025 federal tax return.
They may also qualify for the additional bonus deduction, further increasing their total standard deduction.
Dependent and Additional Standard Deductions
Recent dependent standard deductions, for individuals with investment income or claimed by another taxpayer are shown in the table below. The limit is also capped to $450 + the individuals earned income (up to the basic standard deduction).
| Status | 2025 | 2024 | 2023 |
|---|---|---|---|
| Dependent with investment income only | $1,350 | $1,300 | $1,250 |
| Dependent with earned income | $1,350 – $15,750 | $1,300 – $14,600 | $1,250 – $13,850 |
Standard Deduction vs Itemized Deductions
The standard deduction level is also important when claiming certain deductions. For example, you need to itemize your deductions to claim charitable donations. This assumes your total deductions exceed your standard deduction amount.
You can make this determination when filing your return, which most leading tax software can guide you through.