The IRS today released Revenue Procedure 2025-32, announcing the official inflation adjustments for tax year 2026, the numbers taxpayers will use when filing their 2026 returns in 2027. This annual update carries special significance in 2025 because it integrates changes enacted under the One, Big, Beautiful Bill (OBBBA), reshaping key thresholds for income taxes, deductions, and credits.
For CPAs, tax attorneys, and business owners, these new figures directly impact withholding, estimated tax planning, and entity-level projections heading into the next fiscal year.
These increases reflect a roughly 3.8% rise from 2025 levels, helping offset inflation for most taxpayers.
The IRS adjusted marginal tax brackets upward, meaning more income will fall into lower brackets next year. This prevents "bracket creep," when inflation pushes taxpayers into higher tax rates without real income gains.
Example:
Taxpayers subject to the Alternative Minimum Tax (AMT) should adjust their year-end planning accordingly.
The estate tax exclusion rises to $14.52 million per individual, up from $14.09 million in 2025.This adjustment offers estate planners and high-net-worth clients additional flexibility for wealth transfer and gifting strategies before the scheduled sunset of higher exemptions in 2026 under TCJA provisions.
For practitioners and small-business owners, these inflation adjustments are more than routine.
They form the foundation for:
CPAs and financial advisors should proactively update client tax projections to incorporate the 2026 thresholds, especially for clients near bracket thresholds or estate exclusion limits.
The 2026 inflation adjustments will ripple across tax planning, payroll systems, and compliance strategies. For firms advising high-income clients or managing entity structures, now is the time to recalibrate.
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