Will my paycheck be bigger in January 2026? How tax changes could boost your take-home pay

Your paycheck could be a little bigger in 2026, even if you didn’t get a New Year’s raise. That’s because, in order to adjust for inflation, the Internal Revenue Service (IRS) made some major changes to the tax code last year.

In case you missed it, the changes were announced back in October. Notably, the standard deduction for 2026 (to be filed in 2027)—which reduces the amount of your income you’ll be taxed on—will rise. “For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly,” the October announcement explains. “For single taxpayers and married individuals filing separately, the standard deduction rises to $16,100 for tax year 2026, and for heads of households, the standard deduction will be $24,150.”

Experts say the change is likely to result in Americans saving money on their taxes. “If the standard deduction increases, that means that they’re going to have a lower taxable income, which means that they’ll pay less taxes,” Caroline Bruckner, the managing director of American University’s Kogod Tax Policy Center, said per The Independent.

New income thresholds

Another major change from the IRS is the income threshold for each of the seven federal income tax brackets, which are set to change, too. The highest tax bracket, for those who file individually, is now for incomes over $640,600, which will be taxed at a 37% rate. For married people filing jointly, the same is true for those earning more than $768,700. That group is followed by the 35% bracket, which includes incomes over $256,225 for individuals and over $512,450 for married couples. 

On the lower end of the spectrum, individuals and married couples earning at least $12,400 and $24,800, respectively, will be taxed at a 12% rate. The individual filers earning $12,400 or less will be taxed at a 10% rate. The same will be true for married couples filing jointly who earned $24,800 or less.

According to the Tax Foundation, a nonpartisan tax policy nonprofit based in Washington, D.C., changing tax bracket thresholds is not unusual. And, it’s important for combating what’s known as “bracket creep,” which happens when inflation is the root cause of pushing taxpayers into higher tax brackets. That means it could increase how much taxpayers owe, without an increase in real income. 

While the recent changes to 2025 tax brackets could boost your paycheck, they’re actually fairly modest when compared with recent years. For example, for a single filer, the income threshold for the 10% bracket rose from up to $11,000 in 2023 to $11,600 in 2024. For those married filing jointly, the threshold moved from $22,000 to $23,200. Likewise, the previous year, tax brackets changed by about 7% due to inflation.

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