2026 tax changes: what’s new for the return you file in 2027
The 2025 law created new deductions that apply from 2025 through 2028, and the IRS adjusted the amounts for 2026. Here is a summary of what matters most for families and workers.
A higher standard deduction
- $16,100 for single filers.
- $32,200 for married couples filing jointly.
- $24,150 for heads of household.
Tips: up to $25,000
Qualified tips can be deducted up to $25,000 a year, from 2025 through 2028. It requires a Social Security number valid for employment and a joint return if married. The deduction phases down above $150,000 of income ($300,000 joint).
Overtime: only the extra portion
You deduct the extra “half” of time-and-a-half, not the whole overtime pay, up to $12,500 ($25,000 joint). For example, if you earn $20 an hour and overtime is paid at $30, you deduct $10 for each overtime hour.
The same Social Security number and joint-return rules apply, and it phases down above $150,000 ($300,000). Check that your W-2 shows your overtime when it arrives.
Interest on a new car loan
Up to $10,000 a year in interest if the car is new, for personal use, with final assembly in the United States, and the loan was signed after December 31, 2024. Leases do not qualify. It phases down above $100,000 of income ($200,000 joint), and the return must include the vehicle’s VIN.
Seniors: an extra $6,000
Each person who is 65 or older at year end can deduct an extra $6,000. It phases down above $75,000 of income ($150,000 joint), requires a Social Security number and, if married, a joint return.
No need to itemize
The tips, overtime, car loan interest and senior deductions can be taken even if you use the standard deduction.
Child Tax Credit
It is worth up to $2,200 per qualifying child, and up to $1,700 may be refundable depending on income. According to the IRS, you, your spouse if filing jointly and each child must have a Social Security number valid for employment, issued before the return’s due date.
New 1099 thresholds
- 1099-NEC and 1099-MISC: for 2026 payments they are issued starting at $2,000 (it used to be $600).
- 1099-K: when payments exceed $20,000 and more than 200 transactions.
- Income must be reported even if no form arrives.
General information. Every case is different. This guide does not replace a review of your situation.