3 things taxpayers should know before filing in 2026

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April 14, 2026 / 12:01 PM EDT / CBS News
Filing taxes rarely feels like a straightforward process, but this year's tax filing season is shaping up to be particularly nuanced.

With inflation now ticking up rapidly — recently clocking in at 3.3% , the highest it's been in nearly two years — and household debt levels hovering at new record highs, taxpayers are feeling the weight of the extra financial pressure, and many are now focused on maximizing their refunds or lowering the balances they owe to the federal government this year.

At the same time, the Internal Revenue Service (IRS) has continued to adjust thresholds, deductions and enforcement priorities this year in response to both economic pressure and policy shifts.

That means taxpayers filing their 2025 returns may find that what were once familiar tax rules don't apply in quite the same way, especially when it comes to deductions, credits and reporting requirements.

And, these tax changes could have an outsized impact on the refunds or balances owed.

All of this comes as many filers look to maximize returns or minimize what they owe amid rising living costs.

But understanding what's changed, and what hasn't, will be critical before submitting a return .

Below, we'll outline three key things taxpayers should know before filing in 2026.

Learn how TaxRise can help with your unresolved tax issues now .

From adjusted deductions to stricter reporting requirements, these factors may directly impact how much you owe — or get back — this year:
Several new deductions debuted for the 2025 tax year
Recent legislation introduced four new above-the-line deductions that apply to this year's returns, and unlike many tax breaks, all four are available to both taxpayers who itemize and those who take the standard deduction.

To start, tipped workers may be eligible to deduct up to $25,000 for qualified tips , a limit that applies per return for both single filers and married couples filing jointly.

This applies to employees and self-employed individuals in occupations the IRS identified as customarily and regularly receiving tips on or before December 31, 2024.

There is also an above-the-line deduction for qualified overtime income of up to $12,500 for single filers and $25,000 for joint filers, which starts this year and continues through 2028.

So, W-2 workers who regularly worked overtime hours last year should check their eligibility carefully to determine whether they qualify.

In addition, a new car loan interest deduction allows taxpayers to claim up to $10,000 for new U.S.-assembled vehicles financed after December 31, 2024.

Lease payments do not qualify, though.

And, starting this year and continuing through 2028, eligible taxpayers age 65 or older with a valid Social Security number may claim an additional deduction of up to $6,000 per person or up to $12,000 for married couples filing jointly (if both spouses qualify).

This deduction phases out when modified adjusted gross income exceeds $75,000 for single and head-of-household filers, or $150,000 for joint filers.

Find out how TaxRise can help you resolve your tax debt today .

The standard deduction is larger and so is the SALT cap
The baseline numbers also shifted in favor of taxpayers this year, even for those who don't qualify for the new deductions outlined above.

The IRS adjusted the standard deduction amounts for tax year 2025 for inflation, and the standard deduction is now $15,750 for single filers and married individuals filing separately, $23,625 for heads of household and $31,500 for married filing jointly or a qualifying surviving spouse.

The SALT cap has also been temporarily raised for taxpayers in high-cost states who historically itemized deductions.

These changes have increased the SALT cap to $40,000 for eligible taxpayers through 2029 — up from the $10,000 limit established under the Tax Cuts and Jobs Act.

After 2029, the cap is set to revert to $10,000.

The Child Tax Credit also got a modest bump , with the credit increasing to $2,200 per child for the 2025 and 2026 tax years.

Many changes were retroactive, which could result in surprises
Another thing taxpayers should note is the timing of when these changes took effect.

Some of the tax changes that occurred for this tax filing year are retroactive to the start of 2025 .

In turn, there's a significant chance that you may not have adjusted your withholding or recalculated your estimated tax obligations to account for them.

For some filers, that retroactive effect will be a pleasant surprise in the form of a larger refund because the new deductions reduced taxable income in ways that weren't reflected in paycheck withholding throughout the year.

For others — particularly self-employed workers or those with complex income situations — there may be gaps that need to be addressed now.

This is not a typical tax year.

Recent legislation reshaped core parts of the federal tax code, and with those changes taking effect retroactively for 2025, taxpayers who file without reviewing what's new risk either overpaying or underclaiming.

So, it's important to take stock of whether you received tips or overtime pay, whether you financed a qualifying vehicle or whether you or a spouse turned 65 last year.

Any one of those circumstances could significantly alter what you owe — or what you're owed.

Consider securing a free consultation with TaxRise, which will allow you to better understand your options for this year.