The IRS Standard Deduction for 2026 will increase by $700 for Married Couples to $32,200, by $350 for Single filers to $15,750, and by $525 for Head of Household filers to $24,150. The increases are based on the new OBBB values that were already increased effective 2025.
Taxpayers can choose to deduct the higher of their Federal Standard Deduction or they can itemize their deductions on Schedule A if the itemized deductions are greater.
Effective 2025, taxpayers may also be eligible for a higher State and Local Tax (SALT) deduction as well, which may allow larger Itemized Deductions that may exceed the new higher Federal Standard Deduction. However, those who file Married Filing Separate must elect the same deduction for each of their returns.
While many might still be using the Federal Standard Deduction and therefore are not even reporting their Itemized Deductions, such as mortgage interest, taxes, and charitable contributions, it may be beneficial to list them to assure a complete and accurate tax return. In addition, some state agencies may have much lower thresholds for itemizing deductions so while a taxpayer may not benefit from itemizing their deductions at the Federal level, they may benefit at the State level.
In addition to the increase in the standard deduction, the breakpoints in the tax rates schedule will also increase 3.98% in 2026. This means it will require more income for taxpayers to move up into a higher tax bracket which will cause a greater amount of income to be taxed at lower tax rates.