January 2026 Tax Changes: What to Know Now

🧭 January 2026 Tax Changes: What Oklahoma Taxpayers Need to Know

New year, new rules. The IRS has released its 2026 inflation adjustments and several key updates that affect how much you owe, how much you can deduct, and how you plan for the year ahead. At Keen’s Tax Service, we help Oklahoma taxpayers understand what’s changing, what’s staying the same, and how to make smart moves before filing in 2027.

🧠 Big-picture changes for 2026

For tax year 2026, the IRS adjusted more than 60 provisions for inflation, including tax brackets, the standard deduction, and key credits. These changes apply to returns you’ll file in 2027, but the decisions you make throughout 2026 will determine how those rules affect you.

📊 Updated standard deduction amounts

The standard deduction is increasing again for 2026, which can lower taxable income for filers who don’t itemize. For tax year 2026, the standard deduction is:${” “}

  • Married filing jointly: $32,200
  • Single or married filing separately: $16,100
  • Head of household: $24,150

These amounts are higher than in 2025 and are designed to keep pace with inflation, helping prevent taxpayers from being pushed into higher brackets just because wages rise with prices.

📈 2026 federal tax brackets

The top tax rate remains 37% for single filers with incomes over $640,600 and married couples filing jointly with incomes over $768,700. Other brackets have also shifted upward, meaning more of your income may be taxed at lower rates if your pay doesn’t increase as quickly as the thresholds.

For single filers in 2026, the brackets begin at:

  • 10% on income up to $12,400
  • 12% on income over $12,400
  • 22% on income over $50,400
  • 24% on income over $105,700
  • 32% on income over $201,775
  • 35% on income over $256,225
  • 37% on income over $640,600

Married couples filing jointly use the same rates with roughly double the income thresholds. Knowing where you fall can help you adjust withholding, plan Roth conversions, and time income or deductions more strategically.

🧾 Key 2026 updates that may affect your refund

💳 Higher Earned Income Tax Credit (EITC)

For 2026, the maximum Earned Income Tax Credit increases to $8,231 for qualifying taxpayers with three or more children, up from $8,046 in 2025. Because the EITC is refundable, eligible filers may receive a credit even if they owe no tax, which can significantly boost refunds for low- to moderate-income households.

🏥 Higher FSA and dependent care limits

Flexible Spending Account (FSA) limits are rising in 2026, allowing you to set aside more pre-tax dollars for health and dependent care costs. The maximum health FSA contribution increases to $3,400, and the dependent care FSA limit rises to $7,500 per household. These changes can help offset rising medical and childcare expenses.

👨‍👩‍👧 Adoption credit increase

The maximum adoption tax credit for 2026 increases to $17,670, up from $17,280 in 2025. A portion of this credit may be refundable depending on your income and other factors, offering meaningful relief for families navigating adoption costs.

🏛️ Estate tax exclusion increase

For estates of decedents who die in 2026, the basic federal estate tax exclusion rises to $15,000,000, up from $13,990,000 in 2025. While most households won’t be directly affected, this change matters for high-net-worth families engaged in long-term estate planning.

🚗 Work-related mileage and other adjustments

The IRS also confirmed updated mileage rates and other work-related tax breaks. For 2026, the standard mileage rate for business use of a vehicle increases, allowing self-employed workers, gig workers, and small business owners to claim a larger deduction per mile driven. Medical and moving mileage rates are also adjusted, while the charitable mileage rate remains unchanged.

These changes can be especially important if you rely on your personal vehicle for business, medical travel, or qualifying moves.

🏛️ What this means for Oklahoma taxpayers

While these updates are federal, they interact with your Oklahoma return in important ways. Higher standard deductions and bracket thresholds may lower your federal tax bill, which can influence your overall cash flow, estimated payments, and planning for state taxes. Oklahoma may also update its own thresholds, credits, or relief programs in response to inflation and federal changes.

It’s a good idea to review:

  • Your withholding: to avoid large balances due or oversized refunds
  • Your eligibility for credits: like EITC, child-related credits, and adoption benefits
  • Your use of FSAs and dependent care accounts: to take full advantage of higher limits

🤝 Why Keen’s Tax Service is your January ally

January is the ideal time to look ahead instead of scrambling later. At Keen’s Tax Service, we help you:

  • Review your 2026 tax bracket and adjust withholding or estimated payments
  • Plan contributions to retirement, FSAs, and dependent care accounts
  • Evaluate credits like EITC, adoption, and education benefits
  • Coordinate federal and Oklahoma tax strategy so nothing falls through the cracks

Whether you’re an individual filer, a family, or a small business owner, we’ll help you turn these 2026 changes into a clear, confident plan.

🔗 Helpful resources