What’s New for the 2026 Tax Year?
Important Tax Changes to Know Before Filing in 2027.
New year, new tax rules!
As we look ahead to the 2027 tax filing season, there are several important federal tax changes that could affect your 2026 tax return. From new deductions to changes involving health savings accounts, these updates may make a difference in how your taxes are prepared.
Our goal is to help you stay informed, feel prepared, and make the most of the tax benefits available to you.
Here’s a simple breakdown of some of the biggest changes to know about.
New Deductions
Several new deductions may help eligible taxpayers reduce their federal taxable income.
Qualified tips: Eligible workers may deduct up to $25,000 in qualified tips, subject to income limits and other requirements.
Qualified overtime: Eligible workers may deduct up to $12,500 in qualified overtime compensation, or $25,000 for married couples filing jointly. Income limits and specific rules apply.
Interest on qualifying vehicle loans: Eligible taxpayers may deduct up to $10,000 in interest on certain loans for qualifying new, U.S.-assembled vehicles purchased for personal use.
Additional deduction for seniors: Eligible taxpayers age 65 and older may qualify for an additional deduction of up to $6,000 per person, subject to income limits and other requirements.
A little reminder:
These deductions have specific eligibility rules.
Changes to
Charitable Contributions
Your generosity may have a tax benefit.
Taxpayers who take the standard deduction may qualify for a deduction of up to $1,000 for individuals or $2,000 for married couples filing jointly for qualifying cash donations to eligible charities.
Taxpayers who itemize deductions will face a new rule limiting the deductible portion of qualifying charitable contributions based on 0.5% of adjusted gross income.
Keep those donation receipts.
Proper documentation is important
when determining what you can deduct.
Educators:
Remember This Tax Change
Teachers and other eligible educators should pay special attention to the new rules beginning in 2026.
Eligible educators may deduct up to $350 in qualifying classroom expenses.
NEW, Eligible educators may also be eligible to use qualifing classroom expenses greater than $350 as an itemized deduction.
The expenses that qualify under each deduction are not identical, so the rules must be reviewed carefully.
Eligible expenses may include certain classroom supplies, books, computer equipment, software, and professional development costs. Eligibility requirements and documentation still apply.
If you’re an educator, be sure to tell us about your out-of-pocket classroom expenses when we prepare your return.
Health Savings Accounts (HSAs): New Opportunities
Changes to Health Savings Account rules may open the door for more taxpayers to qualify.
Beginning in 2026:
Certain Bronze and Catastrophic Marketplace health plans may qualify as HSA-compatible.
New rules apply to certain direct primary care arrangements.
Telehealth and remote-care relief has been made permanent, helping preserve access to qualifying telehealth services without automatically affecting HSA eligibility.
The annual HSA contribution limits for 2026 are $4,400 for self-only coverage and $8,750 for family coverage.
HSA eligibility depends on your coverage and individual circumstances, so check with us before assuming you qualify to contribute.
More Changes That
Could Affect Your Return
Here are a few other updates worth knowing:
State and local taxes: The itemized deduction limit increases to $40,400 for most filers, with a lower limit for married taxpayers filing separately. Income-based phase-down rules apply.
Gambling losses: The deduction for gambling losses is limited to 90% of qualifying losses and cannot exceed gambling winnings.
Child and dependent care credit: The maximum credit rate increases to 50% of qualifying expenses. The eligible expense limits remain $3,000 for one qualifying individual and $6,000 for two or more.
Small-business deductions: Qualifying businesses may benefit from changes involving depreciation, equipment purchases, and contractor information-reporting requirements.
Online sales and payment apps: Receiving a Form 1099-K does not automatically mean the entire amount is taxable income. However, income can still be taxable even when no form is issued.
Your individual situation matters,
so not every change will apply to every taxpayer.
One Important Note About
the 2027 Filing Season
Although these changes are scheduled to affect the 2026 tax year, tax guidance is still evolving. The IRS may release additional guidance, revised forms, and updated instructions before the 2027 filing season begins.
That’s why we continue reviewing official IRS information and updating our preparation procedures as needed. We want your return prepared accurately using the rules and instructions that apply when it is filed.
For the latest official information, visit the IRS
We’re Here to Help
Tax laws can change, and keeping up with every new rule can feel overwhelming. That’s where we come in.
As a female-owned business, we believe in treating our clients with care, taking the time to answer questions, and helping you understand your options without making taxes more complicated than they need to be.
When it’s time to file your 2026 tax return, bring your questions, gather your paperwork, and let us help you navigate the changes.
We appreciate the trust you place in us, and we look forward to helping you make the most of tax season!
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