Issue #4 Sept 2026 · Tax Changes & Updates

2026 Tax Update

What Taxpayers Should Know Before Filing in 2027

1. Higher Standard Deduction

For tax year 2026, the standard deduction increases to:

Single / Married Filing Separately: $16,100
Married Filing Jointly: $32,200
Head of Household: $24,150

Tax brackets have also been adjusted upward for inflation.

2. Qualified Tips May Be Deductible

Eligible workers may deduct up to $25,000 of qualified tips. The deduction is available through 2028, although income limits and occupation requirements apply.

Work for Tips? A New Tax Deduction Could Apply to You.

Ask Us How

3. Overtime Workers Have a New Deduction

Eligible taxpayers may deduct the qualified overtime premium portion of their overtime pay.

Maximum deduction:

$12,500 individual
$25,000 married filing jointly

Income limits and other eligibility rules apply.

4. Additional Deduction for Seniors

Taxpayers age 65 or older may qualify for an additional deduction of up to $6,000 per eligible person, or potentially $12,000 for a married couple when both spouses qualify.

This deduction is currently available for tax years 2025–2028 and begins phasing out at higher income levels.

4. Additional Deduction for Seniors

Taxpayers age 65 or older may qualify for an additional deduction of up to $6,000 per eligible person, or potentially $12,000 for a married couple when both spouses qualify.

This deduction is currently available for tax years 2025–2028 and begins phasing out at higher income levels.

5. New Car Loan Interest Deduction

Some taxpayers may deduct up to $10,000 of interest paid on a qualifying personal-use vehicle loan.

Important restrictions apply, including requirements involving when the loan originated and where the qualifying vehicle received final assembly. Leases do not qualify.

5. New Car Loan Interest Deduction

Some taxpayers may deduct up to $10,000 of interest paid on a qualifying personal-use vehicle loan.

Important restrictions apply, including requirements involving when the loan originated and where the qualifying vehicle received final assembly. Leases do not qualify.

5. New Car Loan Interest Deduction

Some taxpayers may deduct up to $10,000 of interest paid on a qualifying personal-use vehicle loan.

Important restrictions apply, including requirements involving when the loan originated and where the qualifying vehicle received final assembly. Leases do not qualify.

What Should You Do Now?

Rather than waiting until filing season:

Review your withholding
Keep records of tips and overtime
Save qualifying vehicle-loan documents
Organize tax records throughout the year
Speak with a tax professional about changes that may affect you

The IRS has also updated its Tax Withholding Estimator to account for several of these newer deductions. Find it Here → IRS Tax Estimator

Will the 2026 Tax Changes Affect You?

Every tax situation is different. Legacy Tax Solutions can help you understand which deductions and tax-saving opportunities may apply to you.

Tax laws and eligibility requirements vary by taxpayer. This information is for general educational purposes and is not individualized tax advice.

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