New tax deductions could save you hundreds. Here's what changed for 2026.
Tax filing season opens Monday, and the rules have changed in your favor — if you know where to look.
New deductions for tips, overtime pay, and car loan interest could put hundreds of dollars back in your pocket. The standard deduction jumped. And seniors get an extra break. But some benefits expire at year's end, and others phase out based on income.
Here's what you need to know before you file.
The big changes
The standard deduction — the amount you can subtract before calculating taxes — increased across the board for 2026.
Married couples filing jointly can now deduct $32,200, up from $31,500. Single filers get $16,100, up from $15,750. Heads of household get $24,150, up from $23,625.
If you're 65 or older, you get an extra $6,000 deduction on top of that. Married couples where both spouses qualify get $12,000 combined. The benefit phases out if your income exceeds $75,000 ($150,000 for joint filers).
Three new deductions you might qualify for For the first time, you can deduct tips you earned — up to $25,000 a year. The deduction applies to voluntary cash or charged tips from customers, including shared tips. You'll need to report them on your W-2 or other income statement.
You can also deduct the overtime portion of your pay — the extra half in 'time-and-ahalf,' for example. The maximum deduction is $12,500 per person, or $25,000 if you're married filing jointly. Like tips, overtime must be reported on your W-2 or income statement.
A third new deduction covers interest on car loans. If you took out a loan after Dec.
31, 2024, to buy a personal vehicle, assembled in the United States, you can deduct the interest paid — up to $10,000 a year.
Lease payments don't qualify. The deduction phases out if your income exceeds $100,000 ($200,000 for joint filers).
All three deductions expire after 2028.
What's expiring now
If you bought an electric vehicle after Sept. 30, 2025, you can no longer claim the federal clean vehicle credit. The same goes for used electric vehicles and commercial clean vehicles.
Home energy credits also ended. If you installed solar panels or made energy-efficient upgrades after Dec. 31, 2025, you can't claim those credits on your 2025 return.
New accounts for children
Starting July 4, 2026, parents can open a 'Trump Account' for their children. The federal government will contribute $1,000 per eligible child as a one-time deposit.
Parents and employers can add up to $5,000 per year to the account. Employers can contribute up to $2,500 per year without it counting as taxable income for the employee.
The money must be invested in mutual funds or exchange-traded funds that track a U.S. stock index, such as the S&P 500. Children can't withdraw the money until they turn 18, when the account is treated like a traditional IRA.
Adoption credit boost
If you adopted a child, up to $5,000 of the adoption credit may now be refundable — meaning you could get money back even if you owe no taxes. Previously, the credit was nonrefundable.
How to prepare
Filing season opened Monday, Jan. 26. The deadline to file is April 15, 2026.
Start by gathering your documents. Collect W-2 forms from employers, 1099 forms from banks and investment firms, and any income statements from gig work or side jobs. If you received tips, overtime pay, or had cryptocurrency transactions, keep those records too.
Create or access your IRS Individual Online Account at IRS.gov. The free account lets you view your tax information, make payments, and track your refund 24/7.
Important: digital assets and cryptocurrency If you bought, sold, or received cryptocurrency, stablecoins, or NFTs, you must report those transactions on your tax return — even if you don't receive a Form 1099-DA from your broker.
Answer the digital asset question on Form 1040 and report any related income, gains, or losses. Failure to report can result in penalties.
Direct deposit is now preferred
The IRS is phasing out paper tax refund checks. If you don't have a bank account, consider opening one so you can receive your refund by direct deposit. It's faster and more secure.
Where to get help
Visit IRS.gov/Help for answers to common tax questions. The Interactive Tax Assistant at IRS.gov/ITA will answer questions based on your specific situation.
If you need free tax preparation help, the IRS Volunteer Income Tax Assistance (VITA) program offers free filing for low- to moderate-income taxpayers. Find a VITA site near you at IRS.gov.
The filing deadline is April 15, 2026. Don't wait until the last minute.
