The One Big Beautiful Bill Act (OBBBA) changed federal tax law starting with 2025 returns. Here is what matters for the 2026 tax year, the returns you file in early 2027.
Standard deduction for 2026
- Single or married filing separately: $16,100
- Married filing jointly: $32,200
- Head of household: $24,150
If your itemized deductions are less than these amounts, you take the standard deduction.
New deductions (2025 through 2028)
- Qualified tips: up to $25,000 for employees and self-employed people in tipped occupations. Tips are still subject to Social Security and Medicare.
- Qualified overtime: the extra "half" portion of required overtime pay, up to $12,500 ($25,000 joint). Employees only. Phases out above $150,000 of income ($300,000 joint).
- Senior deduction: an extra $6,000 for each taxpayer age 65 or older ($12,000 if both spouses qualify). Phases out above $75,000 of income ($150,000 joint). You get it whether or not you itemize.
- Car loan interest: up to $10,000 a year of interest on a loan for a new personal vehicle assembled in the United States. You can claim it without itemizing. Phases out above $100,000 of income ($200,000 joint).
Other changes
- SALT cap: the cap on state and local tax deductions rose from $10,000 to $40,000 in 2025 and goes up 1% a year, to $40,400 for 2026. It phases down for income above $505,000. It returns to $10,000 after 2029.
- Charitable gifts without itemizing (new for 2026): deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying charities even if you take the standard deduction.
- 20% QBI deduction made permanent for sole proprietors, S corporations and partnerships.
- 100% bonus depreciation restored for qualifying business property acquired after January 19, 2025.
- 1099-NEC threshold raised from $600 to $2,000 for payments made in 2026.
- Estate tax exemption: $15 million per person for 2026.
Note: Most of these deductions have income limits and specific rules. This summary is general education only. Call us at (540) 412-7255 to see how they apply to your return.
General education only, not advice for your specific situation. Figures checked October 2026. Tax law changes, so confirm current figures at IRS.gov or ask us.