The 2026 tax filing season is underway, and several changes from the One Big Beautiful Bill Act signed in late 2025 affect how Americans file their returns this year. The standard deduction remains elevated at $15,000 for single filers and $30,000 for married couples filing jointly, but new deductions and credit adjustments create opportunities to reduce your tax bill beyond the standard deduction amount.
The April 15, 2026 deadline for filing federal returns is firm this year (no weekend or holiday extensions). Taxpayers who need more time can file Form 4868 for an automatic six-month extension to October 15, but this extends only the filing deadline, not the payment deadline. Estimated taxes owed must still be paid by April 15 to avoid penalties and interest.
Key Tax Changes for 2026
- Standard deduction: $15,000 (single), $30,000 (married filing jointly)
- SALT deduction cap raised to $40,000 (from $10,000) for taxpayers earning under $500,000
- New above-the-line charitable deduction: $300 for singles, $600 for couples (cash gifts only)
- Auto loan interest deduction: up to $10,000 for vehicles manufactured in the US
- 401(k) catch-up contributions for high earners must be Roth (see Retirement section)
- Standard mileage rate: 70 cents per mile for business use
The Expanded SALT Deduction
The state and local tax (SALT) deduction cap has been the most politically contentious provision in the tax code since 2018. The original $10,000 cap disproportionately affected taxpayers in high-tax states including New York, California, New Jersey, and Connecticut. The new $40,000 cap provides meaningful relief for homeowners in these states who pay significant property taxes and state income taxes.
A taxpayer in New Jersey paying $18,000 in property taxes and $12,000 in state income taxes previously could deduct only $10,000. Under the new rules, the full $30,000 is deductible, saving roughly $6,600 in federal taxes for someone in the 33% bracket. The benefit phases out for taxpayers with adjusted gross income exceeding $500,000.
"The SALT cap increase is the single biggest tax change most homeowners in high-tax states will see this year," said Tim Steffen, director of advanced planning at Baird. "If you itemized in 2025 but were limited by the $10,000 cap, review your deductions again. Many taxpayers will benefit from itemizing for the first time in years."
Strategies to Maximize Your Refund
Bunch Charitable Donations
Even with the new above-the-line charitable deduction, concentrating two years of charitable giving into a single tax year can push you above the standard deduction threshold. Donor-advised funds make this easy: contribute two years' worth of donations into the fund in one year, take the full deduction, and distribute the funds to charities over the following 24 months.
Max Out Retirement Contributions
The 2025 tax year 401(k) contribution limit is $23,500 ($31,500 for those 50+). Traditional 401(k) contributions reduce your taxable income dollar for dollar. If you did not max out during the year, you cannot go back for 401(k) contributions, but you can still contribute to a traditional IRA until April 15, 2026 for the 2025 tax year (up to $7,000, or $8,000 if 50+).
Harvest Tax Losses
If you sold investments at a loss in 2025, those losses can offset capital gains and up to $3,000 of ordinary income. Excess losses carry forward to future years. Review your brokerage 1099-B forms carefully and ensure all losses are captured on your return.
Common Mistakes to Avoid
Forgetting to report cryptocurrency transactions is the most common audit trigger for 2025 returns. The IRS now receives Form 1099-DA from major exchanges. Failing to report transactions that appear on these forms invites scrutiny. Report all crypto sales, exchanges, and conversions, even small amounts. Missing the April 15 payment deadline while relying on a filing extension leads to penalties of 0.5% per month on unpaid balances. Estimate your tax owed and pay at least 90% by April 15.
When to Hire a Professional
Consider hiring a CPA or enrolled agent if your return involves self-employment income, rental properties, stock options, cryptocurrency, or if you are navigating the new SALT cap changes for the first time. The average cost of professional tax preparation ranges from $220 for a simple return to $500-$800 for complex returns, and the fee itself is no longer deductible for individuals. However, the value of professional guidance often exceeds the cost through optimized deductions and reduced audit risk.
