Your 2026 tax return will not be filed until 2027, but most of what goes on it is decided before December 31, 2026. Once the calendar turns, the window for most tax-saving moves closes. What is left in the spring is mostly paperwork.
This year deserves more attention than usual. The One Big Beautiful Bill Act (OBBBA), signed in July 2025, changed a long list of rules, and several of those changes take effect for the first time in 2026. Some help you, a few quietly take something away, and many come with income limits that make planning worthwhile.
In this post we cover what is new for 2026, the moves to consider in the next two months, what to start gathering now, and the key dates for the 2027 filing season.
What’s new for 2026
Higher standard deduction and wider brackets
The seven tax rates (10% through 37%) did not change, but the income ranges for each bracket were adjusted upward for inflation. The standard deduction went up too:
| Filing status | 2025 | 2026 |
| Single / married filing separately | $15,750 | $16,100 |
| Married filing jointly | $31,500 | $32,200 |
| Head of household | $23,625 | $24,150 |
A charitable deduction for people who don’t itemize
Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 of cash gifts to charity ($2,000 for married couples filing jointly). Gifts must be cash (including checks and credit cards) to qualifying public charities. Gifts to donor-advised funds and private foundations do not count. Keep your receipts.
Itemizers face a new charitable “floor”
If you itemize, charitable gifts now count only to the extent they exceed 0.5% of your adjusted gross income. With an AGI of $200,000, the first $1,000 of gifts produces no deduction. Taxpayers in the 37% bracket also see the value of itemized deductions capped at 35 cents on the dollar.
A larger SALT deduction
The cap on deducting state and local taxes rises to $40,400 for 2026 (up from $40,000 in 2025). The higher cap shrinks for incomes above about $505,000 and falls back to $10,000 once income passes roughly $606,000. Texas residents do not pay state income tax, but property taxes and sales taxes count toward the cap, which makes itemizing worth checking for more homeowners.
Deductions that started in 2025 continue
Several OBBBA deductions that began with 2025 returns remain available through 2028, each with its own income limits:
- Qualified tips: up to $25,000 deducted
- Qualified overtime: up to $12,500 ($25,000 for joint filers) of the overtime premium
- Seniors 65 and older: an extra $6,000 per qualifying person
- Car loan interest: up to $10,000 per year on loans for new, U.S.-assembled personal vehicles
Retirement and HSA limits went up
| Account | 2026 limit |
| 401(k), 403(b), most 457 plans | $24,500 (+$8,000 catch-up at age 50+) |
| Traditional and Roth IRA | $7,500 (+$1,100 catch-up at age 50+) |
| HSA (self-only / family) | $4,400 / $8,750 (+$1,000 at age 55+) |
| Dependent care FSA | $7,500 |
Fewer 1099s, same tax
For payments made in 2026, businesses send Forms 1099-NEC and 1099-MISC only when they paid someone $2,000 or more, up from $600. Payment apps and card processors issue Form 1099-K only above $20,000 and 200 transactions. Fewer forms do not mean less income to report. Every dollar of business income is still taxable, whether or not a 1099 arrives.
Moves to make before December 31
1. Run a quick projection. Pull your last pay stub or year-to-date profit and loss, and estimate where you will land. Knowing your bracket tells you whether it makes sense to accelerate deductions or defer income, and whether you are near one of the OBBBA income phase-outs.
2. Check your withholding and estimated payments. If you had a big change this year (a new job, a raise, a side business, a home sale), you may be underpaid. Increasing your W-2 withholding for the last few paychecks is treated as if it were paid evenly all year, which can help avoid an underpayment penalty.
3. Max out retirement contributions. 401(k) deferrals must come out of 2026 paychecks, so talk to payroll now. IRA and HSA contributions for 2026 can be made until April 15, 2027.
4. Plan your charitable giving. If you will take the standard deduction, a cash gift of up to $1,000 ($2,000 joint) now earns a deduction. If you itemize, consider whether “bunching” two years of gifts into one year gets you over the new 0.5% floor. If you are 70½ or older, a qualified charitable distribution from your IRA remains one of the most tax-efficient ways to give.
5. Harvest investment losses. Selling investments that are down can offset gains you have already taken, plus up to $3,000 of ordinary income. Watch the 30-day wash sale rule.
6. Use it or lose it. Spend down flexible spending account balances, and take any required minimum distributions from IRAs and inherited accounts. Missing an RMD triggers a 25% excise tax (reduced to 10% if corrected promptly).
7. Consider a Roth conversion in a low-income year. If 2026 income is lower than usual, converting part of a traditional IRA to a Roth fills the lower brackets now in exchange for tax-free growth later.
8. Gifting. The annual gift tax exclusion is $19,000 per recipient for 2026. Gifts at or below that amount do not require a gift tax return.
Start your document folder now
The fastest, least expensive tax return is one where everything arrives at once. Create a folder (paper or digital) today and drop documents in as they arrive. Here is what most households need:
Income
- W-2s from every employer
- 1099-NEC, 1099-MISC, and 1099-K forms (and your own records of income that didn’t generate a form)
- 1099-INT, 1099-DIV, and 1099-B from banks and brokerages
- 1099-R for retirement distributions and SSA-1099 for Social Security
- K-1s from partnerships, S corporations, estates, or trusts
- Records of rental income and expenses
Deductions and credits
- Form 1098 for mortgage interest, plus property tax statements
- Charitable receipts (cash and non-cash)
- Childcare provider names, addresses, tax ID numbers, and amounts paid
- Form 1098-T for tuition and 1098-E for student loan interest
- Form 1095-A if you had Marketplace health coverage
- Loan documents for any new, U.S.-assembled vehicle purchased with a loan
- Pay stubs showing tips or overtime, if you plan to claim those deductions
Life changes
- Marriage, divorce, or separation documents
- Birth or adoption of a child, or a new dependent
- Purchase or sale of a home
- Settlement statements for any real estate transactions
Identity and security
- Driver’s license or state ID for each taxpayer
- Your 2027 IRS Identity Protection PIN, if you have one (new PINs are issued each January)
- Bank routing and account numbers for direct deposit
A copy of last year’s return is also helpful, especially if you are new to our office.
Extra steps for business owners and the self-employed
Get your books current. You cannot plan around numbers you don’t have. If your bookkeeping is behind, catch it up through September or October now so we can project the full year. This is also when you will spot missing receipts and miscategorized expenses, while there is still time to fix them.
Collect W-9s from contractors. Anyone you paid $2,000 or more in 2026 for services needs a 1099-NEC by February 1, 2027. A W-9 on file for every contractor before you pay them avoids a January scramble.
Time your equipment purchases. With 100% bonus depreciation and a $2.56 million Section 179 limit, equipment, furniture, computers, and qualifying vehicles placed in service by December 31 can often be deducted in full this year. Placed in service means delivered and ready to use, not just ordered.
Review the Qualified Business Income deduction. The 20% QBI deduction was made permanent, and its phase-in range was widened for 2026. If your income is near the threshold, timing income and expenses can make a real difference.
S corporation owners: check your salary and accountable plan. Make sure your 2026 W-2 salary is reasonable for the work you do, and that the company has reimbursed you for business mileage, home office costs, and cell phone use before year-end under a written accountable plan.
Mileage logs. The IRS raised the business mileage rate midyear, from 72.5 cents to 76 cents for miles driven on or after July 1, 2026. Your log needs to separate the two halves of the year.
Make your fourth-quarter estimated payment. It is due January 15, 2027. Paying your estimates on time protects you from underpayment penalties.
Key dates for the 2027 filing season
| Date | What’s due |
| December 31, 2026 | Last day for most 2026 tax moves (401(k) deferrals, charitable gifts, loss harvesting, RMDs, placing equipment in service) |
| Early January 2027 | New IRS Identity Protection PINs become available |
| January 15, 2027 | Fourth-quarter 2026 estimated tax payment |
| February 1, 2027 | W-2s and 1099-NECs due to workers and the IRS |
| March 15, 2027 | Partnership (Form 1065) and S corporation (Form 1120-S) returns, or extension |
| April 15, 2027 | Individual returns (Form 1040), or extension; last day for 2026 IRA and HSA contributions; first-quarter 2027 estimate |
An extension gives you more time to file, not more time to pay. Any tax owed is still due April 15.
Common questions about the 2026 tax year
When can I file my 2026 return? The IRS usually begins accepting returns in late January and announces the exact date in early January. We can prepare your return as soon as your documents arrive, but many forms (especially 1099-Bs and K-1s) aren’t final until February or March.
When will I get my refund? Most e-filed returns with direct deposit are refunded within about three weeks of acceptance. By law, refunds that include the earned income tax credit or the additional child tax credit can’t be issued before mid-February. Direct deposit is strongly recommended, since the government has been phasing out paper refund checks.
Should I itemize or take the standard deduction? Itemize only if your mortgage interest, state and local taxes (including property tax), charitable gifts, and medical expenses together exceed your standard deduction. With the SALT cap now $40,400, more homeowners come out ahead itemizing. We compare both for every return.
Do I really have to report income that wasn’t on a 1099? Yes. All income is taxable whether or not you receive a form. With the 1099-NEC threshold at $2,000 and the 1099-K threshold at $20,000, more income will arrive without paperwork, so keep your own records.
Do I have to file if my income was low? Usually you must file if your income is above your standard deduction, and you must file if you had $400 or more of self-employment income. Even if you aren’t required to, you should file if tax was withheld or you qualify for refundable credits, or you’ll leave money behind.
I got married, divorced, or had a baby this year. What changes? Your filing status is based on your marital status on December 31. A new child can bring the child tax credit and other benefits. Update your W-4 with your employer, and let us know about any life change when you send your documents.
What if I can’t pay what I owe? File on time anyway. The penalty for not filing is much larger than the penalty for not paying. The IRS offers payment plans, and we can help you set one up or look at other options.
Do the new tips and overtime deductions apply to me? They apply to qualified tips and the overtime premium (the “half” in time-and-a-half) reported by your employer, within dollar and income limits. Bring your W-2 and final pay stub so we can confirm the amounts.
Should I get an Identity Protection PIN before filing? We recommend it. It’s free and prevents someone from filing a fraudulent return in your name. Sign up before mid-November, when the IRS online tool goes offline until January.
Let’s plan your 2026 return together
The best time to talk with a tax professional is before the year ends, while there is still time to act. Whether you want a year-end projection, help catching up your books, or simply want to get on our calendar early for the 2027 season, we would be glad to help. We handle individual and business tax preparation, bookkeeping, and IRS representation.
- LP Tax And Bookkeeping Pros LLC, McKinney, TX 75072
- Phone: 303-881-9762
- Email: ralphp@lptaxandbookkeepingpros.com
- Web: www.lptaxandbookkeepingpros.com
This article is for general information only and is not tax or legal advice for your specific situation. Tax rules change, and the right answer depends on your facts. Please contact us before acting on anything here.
Sources
- Accounting Today: IRS inflation adjustments for 2026
- Franklin Templeton: Ten OBBBA tax law changes taking effect in 2026
- TaxAct: 2026 tax changes
- OneDigital: 2026 retirement plan contribution limits
- OnPay: 1099 threshold changes explained
CPA Practice Advisor: IRS business mileage rate increases to 76 cents