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Amid October headlines about the government shutdown, the IRS made a significant announcement without much fanfare: new tax brackets that will impact every taxpayer in the country (1).
Changes to brackets aren’t new. They’re adjusted upwards every year to account for inflation, using the Consumer Price Index (CPI) as a guide.
This can be helpful if your wages are just keeping up with inflation. But this year, the adjustment’s announcement didn’t seem to be big news.
Perhaps because the bump in tax brackets isn’t big, either.
Here’s more on the tax bracket updates and what they could mean for you.
Tax bracket adjustments for the 2025 tax year — including federal income tax brackets — increased by an average of around 2.8%, according to U.S. Bank.
As CBS reports, that contrasts with the IRS bumping tax brackets by a whopping 7% in 2023 and another 5.4% in 2024 to address ongoing inflation following the pandemic (2).
This year’s bump was modest, relatively speaking.
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
The upper end of the lowest tax bracket (10%) has been raised from $11,925 in 2025 to $12,400 in 2026. That’s a 3.9% increase.
Meanwhile, the income threshold for the top marginal tax rate (37%) has been raised from $626,351 to $640,601 for individual tax filers next year. That’s a smaller bump of 2.3%.
Given the top marginal tax rate’s increase is below the current rate of inflation, high earners may want to find other ways to leverage tax advantages when filing a return (4).
For instance, investing in commercial real estate enables you to tap into depreciation and cost segregation tax benefits, potentially reducing your taxable income. You can also leverage a 1031 exchange to roll proceeds from one property into another — without paying taxes right away.
The problem is that direct access to the $22.5 trillion commercial real estate sector was long limited to a select group of elite investors — until now.
First National Realty Partners (FNRP) allows accredited investors to diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.
With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.
Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)’
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)
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, income thresholds are only one of the many elements that ultimately determine how much you’ll have to pay to the government.
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.
High-income households can work with platforms like Range to further reduce their tax burden.
Range is a streamlined, cost-effective way to manage your entire financial life. They offer tax recommendations based on your prior year returns and can evaluate your investment portfolios for tax-loss harvesting opportunities, too.
Beyond taxes, Range also offers investment advisory services. While traditional advisors can charge fees from 0.5% to 2% of your total assets under management (AUM), or between $1,000 to $3,000+ for more comprehensive plans, Range offers flat-fee pricing with 0% AUM fees. That’s a fraction of what you’d pay with a typical Certified Financial Planner.
You can even book a free demo with the Range team after answering a few quick questions about yourself and what you’re looking for from their experts.
Bear in mind that advisory services are not limited to high-income households. And finding the right advisor doesn’t have to be a long, complex process.
Advisor.com has made it simple to speak with licensed financial professionals in your area who can provide personalized guidance — including ways to potentially lower your tax burden.
Beyond tax planning, a professional advisor can also help you determine how many years you have left to invest before retirement, and assess your comfort level with market fluctuations — two key factors in building the right asset mix for your portfolio.
Through Advisor.com, you can schedule a free, no-obligation consultation to discuss your retirement goals and long-term financial plan.
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.
The earned income tax credit is also being raised from $8,046 for the current tax year to $8,231 for families with at least three children in 2026.
Older Americans could enjoy a bigger break in 2026 thanks to the new senior tax deduction of $6,000 — one of the tax changes outlined in Trump’s One Big Beautiful Bill Act
While the 2% to 4% bump in tax brackets may not be adequate for those who’ve experienced higher rates of wage growth or are grappling with rising prices, the new thresholds and broader deductions should give some more wiggle room to manage taxes next year.
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
US Bank (1); CBS News (2), (4); Tax Foundation (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
