Get Ready for Tax Season 2026: 8 Crucial Changes to Know Before Filing

The 2026 tax season, commencing on January 26, brings various changes, shaping how taxpayers will file their returns. These updates stem from President Donald Trump’s 2025 tax law, often referred to as the “big, beautiful bill.” Adjustments in credits, deductions, and other rules could affect your tax refund or payment. As the IRS continues to update its systems, taxpayers should also expect longer wait times for assistance and potential delays in processing returns.

Key Changes You Should Know for the 2026 Tax Season

• 1. Increased Standard Deduction: The standard deduction for 2025 tax returns is now $15,750 for single filers and $31,500 for married couples filing jointly. This increase reflects both the adjustments from the 2017 Tax Cuts and Jobs Act (TCJA) and inflation.
• 2. Higher SALT Cap: The state and local tax deduction cap has risen from $10,000 to $40,000. This cap will increase by 1% each year until 2029, after which it will revert to $10,000. This change significantly benefits joint filers with high property taxes.
• 3. Changes to Child Tax Credit: Taxpayers can now claim a maximum child tax credit of $2,200 per eligible child under 17. This amount rises by $200 from the previous year, with various income limits affecting eligibility.
• 4. Senior Bonus Deduction: Individuals 65 and older can now benefit from an additional $6,000 deduction, dependent on income. This deduction is phased out at $75,000 for singles and $150,000 for joint filers.
• 5. New Deductions and Schedule 1-A: The tax law introduces new deductions and a revamped Schedule 1 and Schedule 1-A. Eligible taxpayers can deduct specific vehicle loan interest and have new opportunities for claiming deductions on qualified tip income and overtime pay.
• 6. Elimination of IRS Direct File: The IRS will not offer its free Direct File option for the 2026 tax season. Taxpayers must rely on IRS Free File or commercial software, among other options, for filing their returns.
• 7. Adjusted 1099-K Reporting: The reporting threshold for Form 1099-K has reverted to the previous rule of $20,000 gross payments and over 200 transactions annually, easing the burden for casual online sellers.
• 8. Restoration of Full Expensing for Small Businesses: Business owners can now claim 100% bonus depreciation for qualified business equipment placed in service after January 19, 2025.

Preparing for the 2026 Tax Season

With these significant changes, taxpayers should evaluate their withholding rates and estimated payments in light of the new tax brackets and deductions. Gathering necessary forms, including 1099-K, is essential. It is also advisable to use online resources to reduce stress during the filing process.

The IRS warns that individuals may experience longer phone wait times and delayed processing for tax returns needing extra scrutiny. Therefore, it is prudent to avoid last-minute filings and promptly address any official IRS correspondence.

In conclusion, taxpayers might experience an increase in refunds, possibly by about $1,000, under the revised rules, depending on individual circumstances. Being informed and prepared is crucial for a smooth tax filing experience in 2026.