We’ve got another tax season arriving, and it’s going to be a doozy thanks to the varying changes brought about by the One Big Beautiful Bill Act. Today, I want to cover the highlights of tax changes coming in 2026 and which ones will have the biggest impact on your return.
What are the 2026 tax brackets and standard deduction?
All income thresholds moved upward (with an extra inflation bump to the 10 percent and 12 percent brackets). So, a slightly larger portion of your income is taxed at lower rates than it would have been otherwise. Consequently, tax changes coming in 2026 may affect how much tax you pay in these brackets.
The standard deduction also increased by $350 for single filers (to $16,100) and by $700 for married couples filing jointly (to $32,200).That’s in addition to the sizable boost that already took effect last year.
Should I reconsider itemizing:
The SALT (State and Local Tax) deduction cap has jumped to $40,000, where it will remain through 2029 (with a yearly 1 percent increase for inflation).
This expansion opens the door for many high-income households (especially those in higher-tax states) to reconsider itemizing.
With all of that said, if you have substantial property or state income taxes, 2026 is a year to consider revisiting your deduction strategy. Moreover, it is essential to understand tax changes coming in 2026 to make informed decisions about itemizing and deductions.
Deductions for tips and overtime:
Beginning with tax year 2025 (the W-2s you’re receiving this month), qualifying workers can claim new federal deductions for overtime pay and tips.
For the overtime deduction, employees may deduct up to $12,500 of premium overtime pay ($25,000 for joint filers). The tip deduction goes up to $25,000 per return and applies only to qualified tips – those customarily earned and properly reported.
What will this look like on your tax return this year? Because the IRS hasn’t revised W-2 reporting for this change yet, as an employee, you’ll calculate the deduction using:
– Social Security tips in Box 7
– Monthly tip reports (Form 4070)
– Certain Box 14 disclosures
– Or Form 4137, if applicable
(Independent contractors can use receipts, POS reports, or tip logs.)
What are some family credits to look out for?
Taxpayers age 65 and older may qualify for a refundable credit up to $6,000, designed to offset rising costs. In typical credit fashion, it phases out at higher incomes.
Also, you can now permanently reduce your tax bill by up to $2,200 for every qualifying child with the Child Tax Credit. And even if you don’t owe any taxes, you could still receive a cash refund of up to $1,700 per child through the credit’s refundable portion.
Final thoughts:
Because of these changes, most filers will either see a small tax cut (or at least gain new options worth reviewing) when they go to file their taxes this spring.
I know it might seem early to get started on this, but I promise you it’s worth it. Furthermore, it pays to stay educated about tax changes coming in 2026 so you aren’t caught off guard.
By starting now you’ll get your refunds faster and less likely delayed. AND, you get the bonus of peace of mind going into tax season.
If you want to discuss how you could utilize these changes in your next return, contact us today!