Federal tax brackets for 2026 were released by the IRS in late 2025 as part of the annual inflation adjustment. For Florida residents, who pay no state income tax, the federal tables are the complete picture. Every dollar of pass-through business income, W-2 wages, and taxable investment income is measured against the figures below.
The bracket shift is modest this year because inflation has cooled — but combined with the permanence of the 2017 Tax Cuts and Jobs Act rates under the One Big Beautiful Bill Act, rate planning in 2026 is more predictable than it has been in years. That predictability is what makes year-round planning tractable rather than guesswork.
The headline
37% is the top marginal federal rate for 2026 — unchanged and now permanent under the OBBBA (IRS Revenue Procedure 2025-32).
2026 Federal Brackets — Single Filers
For unmarried individuals and business owners filing single, the 2026 brackets apply after the standard or itemized deduction and any above-the-line adjustments are subtracted from adjusted gross income.
| Rate | Taxable Income |
|---|---|
| 10% | $0 – $12,400 |
| 12% | $12,401 – $50,400 |
| 22% | $50,401 – $107,350 |
| 24% | $107,351 – $204,900 |
| 32% | $204,901 – $260,200 |
| 35% | $260,201 – $650,600 |
| 37% | Over $650,600 |
2026 Federal Brackets — Married Filing Jointly
| Rate | Taxable Income |
|---|---|
| 10% | $0 – $24,800 |
| 12% | $24,801 – $100,800 |
| 22% | $100,801 – $214,700 |
| 24% | $214,701 – $409,800 |
| 32% | $409,801 – $520,400 |
| 35% | $520,401 – $780,800 |
| 37% | Over $780,800 |
Marginal, not average
A taxpayer in the 24% bracket does not pay 24% on every dollar. Lower rates apply to the income below each threshold; only income above the threshold is taxed at the higher rate. Bracket planning is the discipline of keeping income above a threshold as small as possible in any given year.
Standard Deduction & Key 2026 Limits
| Provision | 2025 | 2026 |
|---|---|---|
| Standard deduction, Single | $15,750 | $16,600 |
| Standard deduction, MFJ | $31,500 | $33,200 |
| 401(k) elective deferral | $23,500 | $24,500 |
| 401(k) catch-up (50+) | $7,500 | $8,000 |
| SEP / Solo 401(k) cap | $70,000 | $72,500 |
| HSA, family | $8,550 | $8,800 |
| Annual gift exclusion | $19,000 | $20,000 |
| Estate exemption (per person) | $13.99M | $14.4M |
What the Florida Owner Should Do
Florida's lack of a state income tax makes federal rate planning unusually high-leverage — every lever has to be federal. The moves that matter most:
- Review withholding against the new brackets to avoid the safe-harbor penalty or an interest-free loan to the IRS
- Recalculate Q1 2026 estimated payments using the new brackets and expected pass-through income
- Maximize retirement contributions at the new limits — stack salary deferrals with employer contributions via a Solo 401(k) or SEP
- Time income and deductions across year-end to land in the most favorable bracket
- Confirm the QBI deduction applies — the 2026 phase-in begins at $201,775 (single) / $403,550 (MFJ)
- Schedule a mid-year check-in in July, while there is still time to correct course
Key takeaway
A Florida S-corp owner with $260,000 of single-filer taxable income sits just $201 above the 32% threshold. A single additional $201 pre-tax retirement contribution drops the marginal bracket to 24%. The effect is hundreds of dollars on a small move — and thousands on a considered plan.
Filing With a Plan vs. Filing by Default
A return filed with a plan shows income smoothed across the year, deductions timed deliberately, and retirement contributions at the current-year maximum — and an April balance within $500 either direction, the mark of calibration. A return filed by default shows the residual: whatever happened to fall out of the calendar year, plus a large balance due or large refund, both signs of drift.
SMAART Tax Team
CPAs & Enrolled Agents, SMAART Tax
