New Tax Benefits for 2026

Tax season is upon us. It is not, however, the best time of year for many Americans across the country. But some people may find a bit of relief this time around. That’s because President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, introducing some new benefits that may help some people lower their taxable income. This could reduce their tax bills or increase their refunds. Note that the bill was passed in 2025, so some provisions would affect your 2025 taxes, which you’d be filing this year in 2026. And keep in mind that the tax filing deadline this year is April 15.

Each year, the standard deduction increases in line with inflation. However, the OBBBA cooked in a 5 percent increase to the inflation-adjusted standard deduction increase.

So the new standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly.

And there’s a bonus for those who are at least 65 years old or blind. Those who meet either category and file single can add an extra $2,000 to their standard deduction. And each qualifying spouse on a joint return can add an extra $1,600.

This is in addition to the bonus standard deduction for those 65 and older. And those that qualify can claim this new senior income tax deduction whether they take the standard deduction or itemize.

However, the amount of the new senior income tax deduction and whether you qualify depends on your modified adjusted gross income (MAGI).

If your MAGI is $75,000 for those filing single or $150,000 for joint filers, the new senior income tax deduction is reduced by six cents for every dollar over that amount.

The new cap on SALT deductions for single filers and married couples filing jointly is $40,000.

However, the new cap gets reduced by $0.30 for every $1.00 above a MAGI of over $500,000. The lowest it can drop to is $10,000.

And the new limit will increase by 1 percent each year through 2029. In 2030, the limit will revert back to $10,000.

The Internal Revenue Service defines qualified tips as “voluntary cash or charged tips received from customers, including shared tips.”

However, the deduction is phased out for single filers with MAGIs above $150,000 and $300,000 for joint filers. It is reduced by $100 for every $1,000 over those limits.

You can’t claim the deduction at all if your MAGI is $400,000 or more for single filers and $550,000 or more for joint filers.

This benefit is available to workers whether they itemize or take the standard deduction.

Employees may deduct up to $12,500 in overtime pay from their taxable income if filing single or $25,000 if married filing jointly.

However, the deduction is reduced by $100 for every $1,000 over $150,000 in MAGI for single filers and $300,000 for joint filers.

And those with MAGIs of $275,000 or greater if filing single or $550,000 if filing jointly can’t claim the deduction at all.

But the deduction amount also depends on your MAGI. The deduction drops by $200 for every $1,000 above $100,000 for single filers and $200,000 for joint filers.

You won’t qualify for the deduction if you paid $10,000 or more in interest for the year and your MAGI is $150,000 or more for single filers and $250,000 or more for joint filers.