The “Big Beautiful Bill” and Inflation Adjustments in Taxes: What You Need to Know for 2025–2026

mariadrg2021
3 days ago
2 min read

At MDR Tax Filing, we believe that an informed taxpayer makes better financial decisions. The recent inflation adjustments included in the so-called “Big Beautiful Bill” (Sections 70101, 70102, 70106, 70107, and 70401 ) bring significant changes to standard deductions and tax brackets , which will directly impact your tax return in 2025 and 2026.

Below, we explain what changes and why planning ahead can help you pay less in taxes.

Why are inflation adjustments important?

Inflation adjustments aim to prevent the so-called "bracket creep" , when a person pays more taxes only because their income increased due to inflation and not because they actually earned more.

These changes:

They increase the standard deduction
They adjust the tax bracket ranges
They protect the taxpayer's purchasing power

However, adjustments alone do not guarantee savings . The key lies in a sound tax strategy.

Increases in the Standard Deduction

Fiscal Year 2026

$32,200 – Married Filing Jointly
$16,100 – Singles and Marrieds Filing Separately
$24,150 – Head of Household

Fiscal Year 2025

$31,500 – Married Filing Jointly
$15,750 – Singles and Marrieds Filing Separately
$23,625 – Head of Household

What does this mean? A higher standard deduction automatically reduces your taxable income, but in some cases, itemizing deductions or strategic planning can yield greater benefits.

Marginal Tax Rates – Fiscal Year 2026

The tax system in the U.S. is progressive, meaning that each portion of your income is taxed at a different rate:

37% Income greater than $640,600 (Single) | $768,700 (Married together)
35% Over $256,225 (Single) | $512,450 (Jointly Married)
32% Over $201,775 (Single) | $403,550 (Jointly Married)
24% Over $105,700 (Single) | $211,400 (Jointly Married)
22% Over $50,400 (Single) | $100,800 (Jointly Married)
12% Over $12,400 (Single) | $24,800 (Jointly Married)
10% Up to $12,400 (Single) | $24,800 (Jointly Married)

Key point: Entering a higher tax bracket doesn't mean that all your income will pay that percentage , but good planning can help you stay in more favorable brackets.