What's new for your 2026 tax return
Many changes from the One, Big, Beautiful Bill Act apply for the first time on the return you file in 2027, on top of the usual inflation adjustments, and the new deductions that started last year continue. Here is every change that matters for individuals, grouped by who it affects, with links to the calculators and guides that go deeper.
General information, not tax advice. Figures are from IRS publications for 2026 (checked October 15, 2026).
Everyone
Brackets and standard deduction
The seven rates (10% to 37%) are now permanent, with brackets adjusted for inflation. The standard deduction is $16,100 single, $32,200 married filing jointly and $24,150 head of household.
Charitable deduction without itemizing
New for 2026: you can deduct up to $1,000 of cash gifts to charity ($2,000 married filing jointly) on top of the standard deduction. Gifts of goods and gifts to donor-advised funds do not count.
Itemizers: new limits
If you itemize, charitable gifts count only above 0.5% of your adjusted gross income. In the top bracket (taxable income over $640,600 single, $768,700 joint), itemized deductions are trimmed by 5.4% of the smaller of the deductions or the income above that line. Gambling losses are capped at 90% of losses (and still no more than winnings).
SALT cap
The cap on deducting state and local income, sales and property taxes is $40,400 ($20,200 married filing separately). It shrinks by 30% of income over $505,000, but not below $10,000. It only helps if you itemize.
Workers and seniors
No tax on tips
Deduct up to $25,000 of qualified tips, phasing out above $150,000 of income ($300,000 joint). From 2026, tips appear in W-2 box 12 code TP, with the tipped occupation code in box 14b.
No tax on overtime
Deduct the premium part of required overtime, up to $12,500 ($25,000 joint), phasing out above $150,000 ($300,000 joint). From 2026 it appears in W-2 box 12 code TT.
Senior deduction
People 65 and older get an extra $6,000 each, whether or not they itemize, reduced by 6% of income over $75,000 ($150,000 joint). Social Security benefits are still taxed the same way.
Car-loan interest
Deduct up to $10,000 of interest on a loan taken out after 2024 to buy a new, U.S.-assembled vehicle for personal use, phasing out above $100,000 ($200,000 joint). Lenders now send Form 1098-VLI showing the interest.
Educators
Teachers can now deduct qualifying classroom expenses as an itemized deduction too, beyond the existing above-the-line educator deduction.
Families
Child tax credit
$2,200 per child under 17, with up to $1,700 refundable. The amount is now adjusted for inflation.
Child and dependent care
The credit rate rises to as much as 50% of up to $3,000 of care costs for one child or $6,000 for two or more. An employer dependent care FSA can now cover $7,500 ($3,750 married filing separately), up from $5,000.
Trump accounts
A new savings account for children, elected on Form 4547 with your return. Children born from 2025 through 2028 can get a one-time $1,000 Treasury deposit. Family and others can add up to $5,000 a year (employers up to $2,500).
Adoption credit
Up to $17,670 per child, and up to $5,120 of it is now refundable, so it can be paid out even if you owe no tax.
529 plans
Tax-free K-12 withdrawals rise to $20,000 per student a year, and more K-12 and job-credential costs qualify.
Education credits
A valid Social Security number, issued by the return's due date, is now required for the American Opportunity and Lifetime Learning credits.
Self-employed, gig workers and investors
1099 thresholds
Businesses now send a 1099-NEC or 1099-MISC only for $2,000 or more (was $600). Payment apps send a 1099-K only above $20,000 and 200 transactions. The income is taxable at any amount.
QBI deduction
The 20% qualified business income deduction is now permanent, with a new $400 minimum if you have at least $1,000 of QBI from an active business, and a wider phase-in range above $201,750 ($403,500 joint).
Social Security wage base
Self-employment Social Security tax applies to the first $184,500 of earnings.
Crypto: Form 1099-DA
Exchanges now report crypto sales on Form 1099-DA, and for sales in 2026 they also report cost basis for coins bought on or after January 1, 2026 at that exchange.
Homeowners, health and energy
Mortgage insurance premiums
PMI and similar mortgage insurance premiums are deductible again as mortgage interest if you itemize.
Casualty losses
Itemized casualty loss deductions now cover state-declared disasters, not just federally declared ones.
Home energy credits ended
The energy efficient home improvement credit and the residential clean energy credit (solar, heat pumps, batteries) ended after December 31, 2025. They cannot be claimed for 2026 projects.
EV credits ended
The new, used and commercial clean vehicle credits ended for vehicles acquired after September 30, 2025.
HSAs
Bronze and catastrophic marketplace plans now qualify for an HSA, and direct primary care memberships no longer disqualify you.
Marketplace premium credit
If household income is over 400% of the federal poverty line, you no longer qualify for the premium tax credit, and there is no longer a cap on paying back excess advance credit at tax time.
Coming in 2027
A new federal tax credit for donations to scholarship-granting organizations starts January 1, 2027. The IRS will also publish 2027 brackets and limits this fall; we add them to the tax brackets page once they are official.
Frequently asked questions
Do these changes apply to the return I file in 2027?
Yes. This page covers the 2026 tax year, which you report on the return due in April 2027. Several provisions, such as the tips, overtime, car-loan and senior deductions, started with 2025 returns and continue through 2028.
Do I need to itemize to get the new deductions?
No. The tips, overtime, car-loan interest and senior deductions and the new charitable deduction for non-itemizers are all taken on top of the standard deduction. The SALT cap, mortgage insurance and the charitable floor only matter if you itemize.
Which changes are temporary?
The tips, overtime, car-loan interest and senior deductions apply for 2025 through 2028. The rates, the higher standard deduction, the child tax credit and the QBI deduction are permanent.
Official sources
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax: What's New for 2026
- IRS: One, Big, Beautiful Bill provisions
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS Schedule 1-A (Form 1040), Additional Deductions
- IRS Publication 15-B (2026), Employer's Tax Guide to Fringe Benefits
- IRS: Form 1099-K threshold reverts to $20,000 under the One, Big, Beautiful Bill
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