What's actually happening with US federal tax rates and brackets in 2026? Need clarity

Thanks for that explanation! I've been trying to figure out what this means for my situation. So if I'm making around $85k as a single filer, would I be able to estimate my 2026 tax situation by looking at the old 2017 brackets and then adjusting them for inflation? Or is there a better way to plan ahead for this? Also, do you think Congress will actually let all these provisions expire, or will they extend some of them? Seems like letting everyone's taxes go up right after an election would be political suicide.

Yes, you could estimate your 2026 taxes by looking at the 2017 brackets and then applying an inflation adjustment. Based on recent inflation, the 2017 brackets would be roughly 25-30% higher in 2026 terms. So for example, if a bracket started at $50,000 in 2017, it might start around $62,500-$65,000 in 2026. As for Congressional action, it's always difficult to predict politics, but there's significant pressure to address this "tax cliff" before it happens. Neither party typically wants to be associated with broad tax increases. The most likely scenario is that Congress will pass some form of compromise legislation that extends certain popular provisions of the TCJA while allowing others to expire. The standard deduction and middle-class tax rates are among the most likely provisions to see some form of extension, but probably not exactly as they are now.

Does this tool actually give accurate projections? Like, how can they know what's going to happen when Congress hasn't even decided yet? And does it take into account all the deductions and credits that might change? I've got two kids and a mortgage so I'm trying to figure out if I should be making different financial moves now.

I'm skeptical about these online calculators. Most of them are just basic templates that don't account for complex situations. Does this one handle things like capital gains, rental income, or self-employment? I have income from a side business and investments, and most tax calculators completely mess up the projections for my situation.

The tool creates projections based on both pre-TCJA tax law and current law, showing you what would happen in different scenarios. It doesn't claim to predict what Congress will do, but it shows you the impact of various possible outcomes so you can plan accordingly. It definitely includes factors like the Child Tax Credit changes and mortgage interest deductions, which will be especially relevant for your situation with kids and a mortgage. Yes, it absolutely handles more complex tax situations! That was actually why I was so impressed. I have some freelance income alongside my W-2 job, and it correctly calculated the self-employment tax implications under different scenarios. It also covers investment income, rental properties, and capital gains changes. I was surprised at how comprehensive it was while still being easy to understand.

How does this actually work? I don't understand how a third-party service can somehow get you through to the IRS faster than calling directly. Seems fishy to me. Does it cost money? And are you actually talking to real IRS agents or just some tax advisors?

This sounds like complete BS. I've heard of these "get through to the IRS" services before and they're all scams. No one can magically bypass the IRS phone system. They're probably just connecting you with some random "tax expert" who gives generic advice you could get anywhere. I'll stick with waiting on hold like everyone else, thanks.

The service basically navigates the IRS phone tree and waits on hold for you. When they finally reach an agent, they call you and connect you directly to that same IRS agent. So you're definitely talking to actual IRS employees, not third-party advisors or anything like that. Yes, there is a cost for the service, but for me it was absolutely worth not wasting an entire day repeatedly calling and waiting on hold. When you need specific answers about your tax situation from an official source, sometimes paying for convenience makes sense. I needed official clarification on some retirement planning questions that only the IRS could answer authoritatively, and this got me those answers without the usual frustration.

I ran some basic numbers for a similar situation to yours. For a married couple with $120k income and 2 kids, the tax increase could be around $3,600-$4,800 per year if everything expires. That assumes: - Standard deduction dropping by about $15k - Tax rates going up in your brackets - Child tax credit dropping from $2k to $1k per child But it really depends on your deductions. If you pay high state/local taxes or have a big mortgage, the return of unlimited SALT deductions might offset some of that increase. Hard to give an exact number without all the details.

Thanks for running those numbers! That's actually worse than I expected - $300-400 extra in taxes per month is definitely going to require some budget adjustments. I do pay about $7k in state income tax and $5k in property tax, so maybe the SALT deduction coming back will help a bit. I guess I better start putting some extra money aside to prepare for this. Really hoping Congress does something before 2026, but not counting on it.

Yes, unless Congress acts, all the pre-TCJA deductions should return in 2026, including miscellaneous itemized deductions subject to the 2% AGI floor. That includes unreimbursed employee expenses, tax prep fees, investment expenses, etc. BUT remember you'll only benefit if your total itemized deductions exceed the standard deduction. Even though the standard deduction will be lower in 2026, it will still be around $7,500-$8,000 for single filers after inflation adjustments.

That's great news! My unreimbursed expenses run about $12k a year, so even with the 2% AGI limitation, I'd still be able to deduct a significant amount. Combined with SALT and mortgage interest, I'll definitely exceed the standard deduction. I'm actually a little less worried about 2026 now. The higher tax rates will still hurt, but getting these deductions back will offset some of the pain.

You're absolutely right to be concerned about the QBI deduction expiring - that's a massive change that doesn't get enough attention! As someone who's also self-employed, I've been researching this extensively. The loss of the 20% QBI deduction combined with higher marginal rates could easily add thousands to your tax bill. For example, if you're currently in the 24% bracket with QBI deduction, you're effectively paying around 19.2% on that business income. In 2026, you could be paying the full 28% rate on the same income. I've been looking into potential strategies like timing income/expenses around the transition year, possibly converting to S-Corp election for certain types of businesses, or maximizing retirement contributions in 2025 while the QBI deduction is still available. Have you considered consulting with a tax professional who specializes in small business? The interaction between QBI expiration, higher rates, and the return of miscellaneous deductions creates some complex planning opportunities that might not be obvious. I'm planning to meet with mine in early 2025 to map out strategies before it's too late to implement them.

This is incredibly helpful information! I had no idea about the AMT exemption reverting back - that could definitely catch a lot of people off guard, especially those of us in states like California or New York who will suddenly be able to deduct our full state taxes again. The estate tax change is something I hadn't even considered. Even though it doesn't affect most people directly, I imagine it's creating a rush of wealthy families trying to use up their current higher exemption amounts before 2026. That probably has some ripple effects on the broader economy and tax planning industry. Your point about running scenarios under both current and projected 2026 law is really smart. I've been so focused on what will definitely happen that I hadn't thought about preparing for multiple outcomes. Do you have any recommendations for software or tools that can model these different scenarios effectively? As a newcomer to really understanding tax planning, I want to make sure I'm not missing any interactions between these various provisions. Thanks for sharing your professional perspective - it's really valuable to hear from someone who deals with these complexities day-to-day!

I completely understand your frustration with the uncertainty! You're right that the timing makes planning incredibly difficult, especially when Congress tends to wait until the last possible moment. For someone in your income bracket in a high-tax state, you're facing a particularly complex situation with the AMT exemption changes. One strategy that might help is to model out a few different scenarios: 1. Accelerate some income into 2025 (like exercising stock options, Roth conversions, or realizing capital gains) while you can still benefit from current rates and higher AMT exemption 2. Defer deductible expenses into 2026 when you might be itemizing again with unlimited SALT 3. Consider bunching charitable contributions - either accelerate them into 2025 for current deduction benefits, or defer them to 2026 when they might provide more value against higher rates The key is probably not trying to optimize for one specific outcome, but rather positioning yourself so that you're not severely penalized regardless of what Congress does. Maybe focus on moves that provide benefit under multiple scenarios rather than betting everything on one outcome. Have you considered working with a tax professional who can run detailed projections for your specific situation? Given your income level and state tax situation, the cost of professional help might pay for itself many times over in tax savings.

You've really captured the essence of what makes this situation so challenging! As someone new to understanding these tax complexities, I'm amazed at how interconnected all these provisions are. What struck me most from this discussion is that some people might actually benefit from certain aspects of the 2026 changes (like unlimited SALT deductions) while being hurt by others (higher rates, reduced standard deduction). It really drives home your point that there's no universal impact. I'm also realizing that the "tax cliff" terminology is quite apt - it's not just a gradual increase but a sudden shift across multiple dimensions simultaneously. The timing uncertainty makes it feel like we're all trying to plan a trip without knowing if the destination or the route will change at the last minute. I think I'm going to start by using some of the tools mentioned earlier in this thread to get a baseline understanding of how these changes might affect me personally, then probably seek professional guidance for more complex planning decisions. The investment in understanding this now seems like it could pay off significantly in avoiding surprises later. Thanks for synthesizing all these insights so clearly - it really helps put the whole picture in perspective!

Welcome to the community! Your question about where to start is really practical and I think many of us have felt that same overwhelm when first diving into tax planning. From everything I've learned in this discussion, I'd suggest starting with understanding your current situation first - specifically gathering information about your income sources, current deductions, state/local tax payments, and any business income if applicable. Once you have a clear picture of where you stand now, the scenario planning becomes much more meaningful. The tax projection tools mentioned earlier in this thread (like the taxr.ai one that several people found helpful) seem like they could be perfect for someone in your situation. They can help you see side-by-side comparisons of current law vs. projected 2026 changes based on your actual numbers, which beats trying to interpret general examples. I'd also recommend focusing on the changes that are most likely to affect you personally rather than trying to understand every single provision. For instance, if you don't have kids, the Child Tax Credit changes won't impact you directly, but if you pay significant state taxes, the SALT deduction return could be huge for your situation. The professionals here seem to agree that 2025 is the year to start planning rather than waiting until 2026 when it might be too late to implement strategies. Better to start with the basics now and build your understanding over time!