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The JAW Journal

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It’s 2026! What’s New and What It Means
for Taxpayers 

A new year brings new beginnings and important updates to the tax landscape. As we move into 2026, several inflation-adjusted tax changes may impact individuals, families, and business owners alike. Working with a trusted tax and accounting partner like JAW Virtual Tax & Accounting can help you stay prepared, informed, and confident as these changes take effect. 

Federal Income Tax Bracket Changes

Federal income tax brackets for 2026 have been adjusted for inflation. While the tax rates themselves remain unchanged, the income thresholds for each bracket have increased. 

Why this matters: 
These adjustments help prevent “bracket creep,” which can reduce the overall tax burden for many taxpayers. Understanding how tax brackets impact your individual tax filing is especially important when preparing your return for the year. 

Standard Deduction Increases 

The standard deduction has increased across all filing statuses for the 2026 tax year, continuing the IRS’s annual inflation adjustments. 

Why this matters: 
A higher standard deduction can lower taxable income and may make itemizing deductions unnecessary for many individuals and families. Our team helps clients determine whether itemizing or taking the standard deduction is the most sensible option based on their individual situation through professional tax preparation services. 

Earned Income Tax Credit (EITC) Updates  

The Earned Income Tax Credit remains a key benefit for eligible taxpayers in 2026. Income limits and maximum credit amounts have been increased to reflect inflation. 

Why this matters: 
Eligibility for credits like the EITC depends on accurate income reporting and proper documentation. Staying informed through reliable tax resources and guidance can help ensure you receive every credit you qualify for.

Qualified Business Income (QBI) Deduction 

The 20% Qualified Business Income deduction for pass-through entities remains in place for 2026, with income thresholds and phase-out limits adjusted upward. 

Why this matters: 
Small business owners, freelancers, and self-employed individuals may benefit significantly from this deduction. Ongoing and personalized support, found through our JAW Subscription plans, can help ensure income and expenses are properly tracked and reported. 

Capital Gains Tax Updates 

Long-term capital gains tax brackets have also been adjusted for inflation in 2026, impacting how investment income, real estate sales, and asset dispositions are taxed. 

Why this matters: 
Strategic tax planning can play a critical role in managing capital gains and investment income, particularly for higher earners or those with complex financial situations

While 2026 does not introduce sweeping tax law changes, inflation-driven adjustments can still significantly impact tax outcomes. Understanding these updates early allows individuals and businesses to plan proactively rather than reactively. 

Whether you need help with an individual return, business taxes, or ongoing financial support, explore our plans and services or start a free consultation to see how we can support you this tax season and beyond. 

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