The IRS has released updated federal income tax brackets for 2026, reflecting inflation adjustments and increased deductions. While these changes may look incremental at first glance, they can have a meaningful impact on tax planning, especially for real estate investors and high-income earners.
Please note, the brackets listed below are for regular income tax, not long-term capital gains tax.
What’s changing for 2026?
For individual filers, these are the new income tax brackets (3):
- 10% tax bracket: $0–$12,400
- 12% tax bracket: $12,401–$50,400
- 22% tax bracket: $50,401–$105,700
- 24% tax bracket: $105,701–$201,775
- 32% tax bracket: $201,776–$256,225
- 35% tax bracket: $256,225–$640,600
- 37% tax bracket: $640,601 and up
These are the new income thresholds for married couples who file jointly:
- 10% tax bracket: $0–$24,800 (up from $23,850 in 2025, a 3.9% bump)
- 12% tax bracket: $24,801–$100,800
- 22% tax bracket: $100,801–$211,100
- 24% tax bracket: $211,401–$403,550
- 32% tax bracket: $403,551–$512,450
- 35% tax bracket: $512,451–$768,700
- 37% tax bracket: $768,701 and up (up from $751,601, a 2.3% bump)
Other increases to tax credits and deductions
The IRS hasn’t just updated income thresholds to reflect inflation. It’s increased deductions across the board, which are now:
- $16,100 for singles and married individuals filing separately
- $24,150 for heads of household, and
- $32,200 for married couples who file jointly.
Depending on your tax filing status and expected income, these new brackets should give you an idea of how much you might owe in taxes next year.
However, investment strategy, timing of income, depreciation, capital gains, and tools like the 1031 exchange can all play a significant role in determining your overall tax liability.
That’s why it can be worth working with a professional tax advisor to make sure you’re planning and optimizing for tax season appropriately.
If you have questions about how current tax law may impact your real estate investments or exchange planning, our team is always here as a resource.
The Guys With All The Answers…
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.
