The Tax Cuts and Jobs Act (TCJA) did NOT expire. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made the 7-bracket structure permanent. The top income tax rate stays at 37% — it will not revert to 39.6%. The 24% bracket does not revert to 28%. All TCJA bracket thresholds are now permanent and inflation-indexed annually. 2026 confirmed top bracket: 37% for single filers above $626,350 ($751,600 married filing jointly). The 'planning window' framing (accelerate income before rates rise) no longer applies — rates are the same in 2027 and beyond as they are in 2026.
At a glance
Key Facts
2026 Tax Brackets — Single Filer
10%: $0–$11,925 | 12%: $11,926–$48,475 | 22%: $48,476–$103,350 | 24%: $103,351–$197,300 | 32%: $197,301–$250,525 | 35%: $250,526–$626,350 | 37%: above $626,350. These brackets are now permanent under OBBBA, inflation-indexed annually.
OBBBA made the TCJA's 37% top rate permanent. The feared return to 39.6% will not happen. Under pre-TCJA law, the top rate was 39.6% — this rate is now off the table permanently (unless future Congress changes it).
Roth Conversion Strategy — Updated
Roth conversions are still valuable with permanent rates — the benefit comes from tax-free growth, not from locking in a rate before it rises. Convert up to the top of your current bracket (e.g., fill the 22% or 24% bracket in a low-income year). The urgent 'convert before 2027 rate rise' calculus is gone, but the long-term benefit of tax-free Roth growth remains. Roth conversions make most sense: in years with unusually low income; after retirement before RMDs begin; when heirs will benefit from tax-free inherited Roth accounts.
Long-Term Capital Gains Rates — Unchanged
Federal long-term capital gains (LTCG) rates (0%, 15%, 20%) are unchanged. OBBBA maintained the TCJA thresholds: 0% for single filers with taxable income up to ~$47,025; 15% up to ~$518,900; 20% above. The 3.8% NIIT on incomes above $200,000 (single) / $250,000 (MFJ) is also unchanged. No urgency to harvest gains before rate changes — the rates and thresholds are now stable.
Introduction
The Tax Cuts and Jobs Act (TCJA) of 2017 lowered income tax rates across all brackets — most visibly reducing the top rate from 39.6% to 37% and restructuring the bracket thresholds. For several years, these provisions were scheduled to expire after December 31, 2026. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, prevented that expiration. The 7-bracket structure is now permanent. This guide explains the confirmed 2026 tax brackets, what OBBBA preserved, and how planning strategies change now that rates are known to be permanent.
Section 01
OBBBA Prevented the TCJA Sunset — What That Means
The TCJA was originally enacted with a sunset clause: all individual income tax provisions would expire after December 31, 2026, reverting to pre-2018 law. This created the 'TCJA cliff' — a hard deadline for tax planning. The One Big Beautiful Bill Act (OBBBA), signed by President Trump on July 4, 2025, resolved the cliff.
What Would Have Happened (Without OBBBA)
Provision
TCJA (2026)
Post-Sunset (2027) Without OBBBA
Top income tax rate
37%
39.6%
Standard deduction (single)
$16,100
~$8,300
Estate exemption
$15M
~$7M
Child tax credit
$2,000
$1,000
SALT cap
$10,000
Unlimited (cap expires)
QBI 20% deduction
20% of QBI
Gone entirely
What OBBBA Actually Did
Made permanent: All seven income tax brackets (10–37%), standard deduction, QBI deduction, AMT exemption thresholds, estate tax exemption
Improved: Estate exemption raised to $15M permanent; child tax credit raised to $2,200; SALT cap raised to ~$40,400 (through 2029)
Added new: Tip income exclusion (up to $25,000), overtime exclusion (up to $12,500 MFJ), senior deduction ($6,000 per person 65+) — all through 2028
Section 02
2026 Confirmed Tax Brackets — Single and Married
The 2026 brackets are confirmed and permanent (subject to annual inflation indexing). The following thresholds apply for tax year 2026 (returns due April 2027):
Single Filers
Taxable Income
Rate
$0 – $11,925
10%
$11,926 – $48,475
12%
$48,476 – $103,350
22%
$103,351 – $197,300
24%
$197,301 – $250,525
32%
$250,526 – $626,350
35%
Over $626,350
37%
Married Filing Jointly
Taxable Income
Rate
$0 – $23,850
10%
$23,851 – $96,950
12%
$96,951 – $206,700
22%
$206,701 – $394,600
24%
$394,601 – $501,050
32%
$501,051 – $751,600
35%
Over $751,600
37%
These brackets are inflation-indexed annually. The 2027 brackets will be slightly higher than 2026 (based on CPI), not structurally different. The 24% bracket does not become 28%. The 37% top rate stays at 37%.
Section 03
Tax Planning With Permanent Rates
With OBBBA making rates permanent, tax planning shifts away from 'deadline urgency' toward perennial strategies that work in any rate environment:
Roth Conversions — Still Valuable, Different Calculus
The reason to do Roth conversions is no longer 'lock in rates before they rise in 2027.' With permanent rates, conversions make sense when: (1) your current-year income is lower than your expected long-term rate (e.g., early retirement years before Social Security and RMDs kick in); (2) you expect your heirs to benefit from tax-free inherited Roth distributions; (3) you want tax diversification across pre-tax, Roth, and taxable accounts. Convert up to the top of your current bracket — still the right math, just not urgent.
Capital Gains Harvesting — Ongoing, Not Urgent
The 0% LTCG bracket (income up to ~$47,025 for single filers in 2026) is still available and permanent. Harvesting gains in low-income years remains a powerful strategy. The urgency to harvest before a threshold change is gone — the thresholds are now stable.
QBI Deduction — Permanent for Pass-Through Businesses
The 20% Section 199A deduction for qualified business income is permanent under OBBBA. Pass-through businesses (S-corps, partnerships, sole proprietors) can plan long-term around this deduction rather than treating it as a temporary provision. The W-2 wage limitation phase-in range for 2026 is $403,500–$553,500 (MFJ) — per Rev. Proc. 2025-32, OBBBA expanded the MFJ range from $100K to $150K.
Estate Planning — Permanent $15M Exemption
The estate tax exemption is now $15,000,000 per person (permanent). Large gifts made to 'lock in' the exemption before a sunset are no longer urgent for that reason — though annual gifting ($19,000 per donee in 2026) and trust strategies remain useful for estate planning regardless of the exemption level.
No. The 37% top income tax rate is now permanent under the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. The TCJA was originally scheduled to expire after December 31, 2026, which would have reverted the top rate to 39.6% in 2027. OBBBA prevented this — the seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) is permanent and inflation-indexed annually.
Q
Should I still do a Roth conversion now that rates are permanent?
Yes, Roth conversions can still be valuable, but the calculus changes. The 'convert before 2027 rate rise' urgency is gone. The enduring reason to convert: if your current-year income is unusually low (early retirement, career gap, large deductions), converting at a lower current bracket rate beats paying higher rates later when income rises. The long-term benefit of tax-free Roth growth remains. Convert up to the top of your current bracket in low-income years — the optimal strategy for permanent rates rather than deadline-driven conversions.
Q
Are capital gains tax rates different in 2026 vs 2027?
No. Long-term capital gains rates (0%, 15%, 20%) are unchanged by OBBBA, and the LTCG thresholds are now permanent at TCJA levels (inflation-indexed annually). The 2027 thresholds will be slightly higher than 2026 (inflation adjustment) — not lower. The urgency to harvest gains before a threshold shift disappears. The 3.8% NIIT on incomes above $200,000 (single) / $250,000 (MFJ) is also unchanged.
Q
What rate was the top federal income tax rate before the TCJA?
Before the TCJA (pre-2018), the top federal income tax rate was 39.6%. TCJA reduced it to 37% — a 2.6 percentage point reduction. OBBBA made the 37% rate permanent. The 39.6% rate is now a historical reference point, not a planning risk.
Disclaimer:This guide provides general tax information for educational purposes only. Tax rates and thresholds are based on IRS published figures for tax year 2026 and OBBBA as enacted. This is not tax advice. Consult a CPA for tax planning specific to your situation.