1. Overtime and tips on your W-2
For 2025, employers didn't have to report the overtime premium or tips separately, so many people worked them out from pay stubs. For 2026, your W-2 shows qualified overtime in box 12 with code TT, and the total cash tips you reported to your employer in box 12 with code TP, plus your occupation code. You can claim the overtime deduction for the amount reported there; if it looks wrong, ask your employer for a corrected W-2c.
The deductions themselves are unchanged: up to $12,500 of overtime premium ($25,000 joint) and up to $25,000 of qualified tips, phasing out above $150,000 of income ($300,000 joint). Estimate them with the overtime and tips calculators.
2. Senior and car loan deductions, year two
People 65 or older can deduct up to $6,000 each, shrinking above $75,000 of income ($150,000 joint): see the senior deduction calculator. Interest on a loan for a new, U.S.-assembled vehicle bought after 2024 is deductible up to $10,000: see the car loan interest calculator. All four deductions go on Schedule 1-A.
3. New standard deduction and brackets
| Filing status | 2026 standard deduction |
|---|---|
| Single or married filing separately | $16,100 |
| Head of household | $24,150 |
| Married filing jointly | $32,200 |
Tax brackets moved up with inflation. Full tables and a calculator: 2026 tax brackets and standard deduction.
4. Charity without itemizing
Starting with 2026, if you take the standard deduction you can also deduct cash gifts to charity, up to $1,000 ($2,000 on a joint return).
5. Higher limit for state and local taxes
If you itemize, the deduction for state and local taxes is capped at $40,400 for 2026 ($20,200 married filing separately), with a lower cap at incomes above $505,000 ($252,500 married filing separately).
6. Child tax credit of $2,200
The child tax credit is up to $2,200 per qualifying child under 17, and the credit for other dependents is $500. See who counts as an other dependent and estimate your refund with the tax refund calculator.
Proposed: citizenship test for refundable credits
Proposed regulations released in August 2026 would treat the refunded part of the earned income credit, additional child tax credit, refundable American opportunity credit and refundable adoption credit as a federal public benefit, available only to U.S. citizens, U.S. nationals and qualified aliens, with a new Schedule 3-A. The non-refundable part isn't affected, and the rules apply only once they are final. Watch the IRS instructions for your 2026 return.
7. Refunds by direct deposit; paper checks mostly phased out
The IRS generally stopped issuing paper refund checks to individuals after September 30, 2025. Put your bank or prepaid card routing and account numbers on your return. Without them, the IRS mails a CP53E notice asking for them within 30 days; if you don't respond, a paper check is released after about six weeks. Limited exceptions, such as hardship, still allow a paper check, and refunds for deceased taxpayers are still paid by check. The account must be in your own name or a joint account, and you get one chance to add or correct it online. Expected dates: IRS refund schedule 2027.
8. Trump accounts for children
Children born 2025 through 2028 can get a one-time $1,000 from the government in a Trump account. A parent elects it on Form 4547, which can be filed online or with your tax return. See the Trump account calculator.
9. Get your paycheck right
If you expect the overtime, tips or senior deduction again, Form W-4 lets you count it in your withholding instead of waiting for a refund (the IRS releases a 2027 version for next year): how to fill it out.
Common questions
When does the 2027 tax season start? The IRS usually starts accepting returns in the last week of January and announces the date in early January. Returns for tax year 2026 are due April 15, 2027.
Are the overtime and tips deductions still available for 2026? Yes. They apply to tax years 2025 through 2028, so 2026 is the second year. The limits are the same: up to $12,500 of overtime premium ($25,000 joint) and up to $25,000 of qualified tips.
Will I get a paper refund check? Probably not. The IRS generally stopped issuing paper refund checks to individuals after September 30, 2025. Put your bank or prepaid card routing and account numbers on your return. Without them, the IRS sends a CP53E notice; reply with bank details and the refund is released, or a paper check follows about six weeks later if you don't respond. Limited exceptions allow a paper check.
Can I deduct charity without itemizing in 2026? Yes. Starting with 2026, if you take the standard deduction you can deduct cash gifts to charity up to $1,000, or $2,000 on a joint return.
What is the 2026 standard deduction? $16,100 for single filers and married filing separately, $24,150 for heads of household and $32,200 for married couples filing jointly.
Updated November 5, 2026. Sources: IRS Rev. Proc. 2025-32; IRS Form W-4 (2026); IRS questions and answers on Executive Order 14247 (paper refund checks); IRS Instructions for Form 4547; Internal Revenue Code §§224, 225, 151(d)(5)(C), 163(h)(4).