A pay raise usually means more money in your pocket, but it can also leave workers wondering whether they'll owe more in taxes. The IRS has adjusted federal income tax brackets for 2026 to account for inflation. The tax rates haven't changed, but the income limits have.
Inflation increases the cost of everyday goods. To help you keep up, your employer might give you a raise. However, if tax rates stayed frozen while your income went up, that raise could push you into a higher tax bracket.
