2026 Tax Season: What Individuals Need to Know

This guide explains the most important tax changes coming in 2026 for your 2025

Individual tax return.

Our goal is to help you understand what has changed, how it may affect you, and what you should do now to prepare.

IMPORTANT DATES

• IRS begins accepting tax returns; January 26, 2026

• Tax filing deadline: April 15, 2026

• Extension deadline (if filed): October 15, 2026

IMPORTANT: Even with an extension, taxes owed must still be paid by April 15 to avoid penalties and interest.

WHAT’S NEW FOR 2026

STANDARD DEDUCTION (MOST PEOPLE USE THIS)

The standard deduction is the amount the IRS lets you subtract from your income before taxes are calculated.

For most people, this means you don’t need to itemize deductions.

These increases mean more income is protected from taxes, which can lower what you owe.

• Higher deductions usually mean lower taxes.

STATE AND LOCAL TAX (SALT) DEDUCTION INCREASE

If you itemize deductions, you may deduct state and local taxes paid (property taxes, state income taxes).

• The limit increased from $10,000 to $40,000.

This mostly benefits homeowners and higher-income taxpayers.

OVERTIME PAY DEDUCTION

Some taxpayers may be able to deduct a portion of their overtime pay and tip income, which can help lower their overall tax bill.

Overtime Pay Deduction

If you earned overtime pay, you may qualify for a new deduction:

• Up to $12,500 for single filers

• Up to $25,000 for married filing jointly

This deduction reduces your taxable income, meaning the amount of income the IRS uses to calculate your income taxes is lower.

Tip Income Deduction

Workers who earn tips (such as in restaurants, hospitality, beauty services, or delivery jobs) may also qualify for a similar deduction on reported tip income:

• Up to $12,500 for single filers

• Up to $25,000 for married filing jointly

Only properly reported tips qualify for this deduction.

EXTRA DEDUCTION FOR SENIORS (AGE 65+)

Taxpayers age 65 or older receive additional deductions. In 2025, a new bonus deduction was added.

This bonus stacks on top of the standard deduction, significantly reducing taxable income for seniors.

CHILD TAX CREDIT

The child tax credit remains expanded.

EARNED INCOME TAX CREDIT (EITC)

• This credit increased slightly due to inflation.

It helps low- to moderate-income workers, especially those with children.

Clean Energy & Electric Vehicle Tax Credits Are Ending

These tax credits end after December 31, 2025.

• That means the improvements must be installed and completed by the end of 2025 to qualify.

• The federal $7,500 electric vehicle tax credit, which helped reduce the cost of qualifying EVs, expired on September 30, 2025.

What’s changing:

• EV purchases made after September 30, 2025 no longer qualify for the federal EV tax credit.

• This applies even if the vehicle would have qualified under the old rules.

  
  

REFUNDS & PAYMENTS

The IRS no longer issues paper refund checks. All refunds will be issued via direct deposit.

WHAT YOU SHOULD DO NOW

• Gather tax documents early (W-2s, 1099s, mortgage interest, property taxes).

• Review overtime pay and senior deductions if applicable.

• Maximize retirement contributions before year-end.

• Meet with your tax professional early to plan ahead.

WHY PLANNING MATTERS

Tax laws change every year. Understanding these updates helps:

• Reduce taxes owed

• Avoid penalties

• Maximize deductions and credits

• Receive refunds faster

If you have questions or want personalized planning, contact our office at 504-315-2667