Important 2026 Tax Changes You’ll Notice When Filing in 2027

Here are the big 2026 tax-year items people need to know for returns filed in early 2027:

1. Standard deduction is higher

   • Single/MFS: $16,100

   • Married filing jointly: $32,200

   • Head of household: $24,150
     

2. New senior deduction continues. Taxpayers age 65+ may qualify for an extra $6,000 deduction per person, phased out at higher income levels. This is separate from the normal extra standard deduction for seniors.
   

3. Child Tax Credit is higher. The Child Tax Credit is generally $2,200 per qualifying child under 17 for 2026.
   

4. Tips and overtime may have special deductions. Qualified tip income may be deductible up to $25,000, and qualified overtime may be deductible up to $12,500, or $25,000 for joint filers, subject to income phaseouts.
   

5. Car loan interest may be deductible. For qualifying personal-use vehicles, taxpayers may deduct up to $10,000 of qualified auto loan interest. Leases do not qualify.
   

6. 1099-K threshold is back to the old rule. Payment apps generally issue 1099-Ks when business payments exceed $20,000 and 200 transactions, not just $600.
   

7. Retirement limits increased. IRA limit is $7,500, with a $1,100 catch-up for age 50+. 401(k) employee deferral limit is $24,500.
   

8. Gambling loss deduction gets worse. Starting in 2026, gambling losses are generally limited to 90% of gambling winnings, which means gamblers can owe tax even when they broke even overall.