IRS Announces 2026 Tax Adjustments: What Creators, Small Business Owners, and High-Income Professionals Need to Know

The IRS recently released the annual inflation adjustments for tax year 2026, including updates under the One Big Beautiful Bill Act (OBBBA). These adjustments affect more than 60 tax provisions, from standard deductions to tax credits and retirement contributions.

Whether you’re a YouTuber, TikToker, Shopify store owner, Amazon seller, filmmaker, dentist, doctor, or high-net-worth individual, understanding these changes can help you plan ahead and keep more of what you earn.

At Velin & Associates, Inc., we specialize in helping clients optimize taxes while staying compliant.

Standard Deduction Increases

For 2026, the standard deduction rises:

• Married Filing Jointly: $32,200
• Single or Married Filing Separately: $16,100
• Head of Household: $24,150

Example:
A TikToker who files as single and earns $70,000 in 2026 can subtract $16,100 as a standard deduction, reducing taxable income to $53,900.

Planning ahead with standard deductions can help creators, Shopify store owners, and other entrepreneurs reduce their federal tax liability without complicated itemized deductions.

Marginal Tax Rates

The top tax rate remains 37% for individuals earning over $640,600 ($768,700 for married couples filing jointly). Other key rates include:

• 35% for incomes over $256,225 ($512,450 joint)
• 32% for incomes over $201,775 ($403,550 joint)
• 24%, 22%, 12%, and 10% for lower income brackets

Example:
A dentist earning $250,000 in taxable income falls into the 32% bracket for a portion of their income. Proper planning and deductions can reduce taxable income and save thousands in taxes.

Credits and Deductions Adjusted for 2026

Alternative Minimum Tax (AMT) Exemption

• $90,100 for unmarried individuals (phases out at $500,000)
• $140,200 for married couples (phases out at $1,000,000)

Estate Tax

• The basic exclusion amount rises to $15,000,000 per estate.

Adoption Credit

• Maximum credit increases to $17,670, with up to $5,120 refundable.

Employer-Provided Childcare Credit

• Maximum credit jumps from $150,000 to $500,000 ($600,000 for eligible small businesses).

Example:
A small business owner providing childcare benefits to employees can now claim a significantly larger tax credit, helping offset business costs while supporting staff.

Earned Income Tax Credit (EITC)

• Maximum credit for taxpayers with three or more children: $8,231

Qualified Transportation Fringe Benefits

• Monthly limit increases to $340 (up $15 from 2025)

Health Flexible Spending Accounts

• Contribution limit rises to $3,400
• Carryover maximum: $680

Example:
A filmmaker contributing to a Health FSA can now save more pre-tax dollars for medical expenses, reducing taxable income while covering essential healthcare costs.

Foreign Earned Income Exclusion

• Increases to $132,900 for 2026

Items Unchanged by Inflation

Certain tax items remain unaffected:

• Personal exemptions remain $0
• Itemized deduction limitations continue for high-income taxpayers
• Lifetime Learning Credit phaseout thresholds remain unchanged

Example:
A dentist claiming educational credits for continuing education must note that the income limits have not changed from prior years, ensuring accurate planning.

Why This Matters to You

Whether you are a CPA for YouTubers, Shopify Store CPA, CPA for Creators, Amazon Business CPA, Dentist CPA, CPA for Doctors, or CPA for High Net Worth Individuals, understanding the 2026 tax adjustments allows you to:

• Plan estimated tax payments effectively
• Maximize deductions and credits
• Avoid surprises at filing time
• Reduce overall tax liability

Example:
A Shopify store owner can review adjusted standard deductions, transportation benefits, and FSA contributions to determine the best strategy for quarterly tax payments and year-end planning.

Take Action Now

Planning ahead is key. The sooner you understand these adjustments, the more you can save. Our team at Velin & Associates, Inc. is ready to help you navigate 2026 tax changes and build a strategy tailored to your business or personal situation.

For more information about our tax planning services, contact us today: visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org