7 New Tax Changes for 2026: Don’t Miss These Deductions!
The 2026 filing season introduces some of the biggest tax changes in years. From brand-new deductions to updated credits, these seven changes could save you thousands of dollars — but only if you know about them before you file. In this video, we break down every change, including dollar amounts, income limits, and the new IRS form you’ll need.
The New Schedule 1-A Form
Four of the seven new deductions are claimed on a brand-new IRS form called Schedule 1-A. This form didn’t exist before this filing season. If your tax software hasn’t been updated, it won’t include Schedule 1-A — and you’ll miss every new deduction without knowing it. Make sure your software is current before you file.
All 7 Changes at a Glance
Here’s a quick summary of every change covered in the video:
- No Tax on Tips — Tipped workers can deduct up to $25,000 in qualified tip income. Income phase-out begins at $150,000 (single) or $300,000 (joint). Filed on Schedule 1-A.
- No Tax on Overtime — Hourly employees can deduct up to $12,500 in overtime premium pay ($25,000 for joint filers). Must be FLSA-covered overtime. Filed on Schedule 1-A.
- Car Loan Interest Deduction — A new deduction of up to $10,000 for interest on loans for new vehicles assembled in the USA. The vehicle must weigh under 14,000 pounds and the MSRP can’t exceed $100,000. Filed on Schedule 1-A.
- Senior Bonus Deduction — Filers aged 65 and older get an additional $6,000 deduction ($12,000 for joint filers where both are 65+). Income phase-out starts at $75,000 (single) or $150,000 (joint). Filed on Schedule 1-A.
- Child Tax Credit Increase — The credit increased to $2,200 per qualifying child under 17, with a higher refundable portion of $1,900.
- Standard Deduction Increase — New amounts: $15,750 (single), $31,500 (married filing jointly), $23,625 (head of household). This means more of your income is automatically shielded from taxes.
- No More Paper Refund Checks — The IRS is phasing out paper checks. Make sure your direct deposit information is on file to avoid refund delays or frozen payments.
Important Things to Know
All new deductions from the One Big Beautiful Bill are available whether you take the standard deduction or itemize. They don’t replace each other — you can claim every deduction you qualify for. However, the Schedule 1-A deductions (tips, overtime, car loan interest, and senior bonus) are temporary and expire after the 2028 tax year unless Congress extends them.
Free Filing Options
If your income is $89,000 or less, you may be able to file for free through the IRS Free File program. The IRS also offers Direct File for eligible filers. The filing deadline for the 2025 tax year is April 15, 2026.
Download the Free Guide
Our free companion guide covers every change in detail — including eligibility checklists, dollar amounts, income phase-out tables, and common mistakes to avoid.
This is Video 1 in our 2026 Tax Changes series. Watch Video 2: No Tax on Tips for the deep dive on the tip income deduction, and subscribe to GovClarity on YouTube for new guides every week.
