Timely Topics

Updates and reminders that may impact your personal financial planning

Key Personal Tax Changes for 2026 Tax Year

Now that the filing date for 2025 taxes has passed, we thought it would be timely to share a few of the key changes for the 2026 tax year.

• Direct Deposit Freeze: Returns filed without direct deposit information will be frozen until the taxpayer provides it, and rejected direct deposits will not be automatically reissued as paper checks.

• Increased Standard Deduction: The standard deduction rises to $32,200 for married couples filing jointly and $16,100 for single taxpayers.

• Higher SALT Cap: The state and local tax (SALT) deduction cap is increased to $40,400.

• New Senior Deduction: Individuals aged 65 and older may claim an additional $6,000 deduction, beginning to phase out at $75,000 for singles and $150,000 for married filers.

• Tipped & Overtime Deductions: New deductions allow up to $25,000 for qualified tips and $12,500-$25,000 for qualified overtime income.

• Child Tax Credit Expansion: The Child and Dependent Care tax credit is expanded, with maximum rates increasing to 50% of qualifying expenses.

• Charitable Donations: Non-itemizers can deduct cash donations up to $1,000 (single) or $2,000 (joint).

• Auto Interest Deduction: For the 2026 tax year (covering vehicles purchased in 2025 or 2026), the "No Tax on Car Loan Interest" provision allows qualified individuals to deduct up to $10,000 in interest paid on new, U.S.-assembled vehicles purchased for personal use.