Before You File! Your Federal 2026 Tax Tips & Preparation Guide

Every tax year comes with subtle shifts that can change the math. Income thresholds move, deductions adjust, and new provisions can create opportunities or confusion. Filing without reviewing those updates can mean missing options that were available to you.

In this guide, we’ll break down what’s new, who may benefit, and what actions may still be worth considering before you file. We’ll also share how you can get extra help with this year and with any tax planning going forward. 

What Changed for 2026? Federal Inflation Adjustments and Bracket Updates

Each year the IRS adjusts key tax numbers to keep pace with inflation. These adjustments help prevent bracket creep, where inflation pushes you into a higher tax bracket even if your real purchasing power has not meaningfully increased.

Below is a side by side comparison of 2025 and 2026 figures so you can see what applied to the return you are filing and what now applies to the income you are earning this year.

Federal Income Tax Brackets 2025 vs. 2026

Federal income tax rates remain at seven tiers ranging from 10 – 37%. What changes each year are the income thresholds for each bracket.

Here’s a clean comparison for taxable income ranges by filing status:1

Single

10%: $0–$11,925 (2025) | $0–$12,400 (2026)
12%: $11,926–$48,475 (2025) | $12,401–$50,400 (2026)
22%: $48,476–$103,350 (2025) | $50,401–$105,700 (2026)
24%: $103,351–$197,300 (2025) | $105,701–$201,775 (2026)
32%: $197,301–$250,525 (2025) | $201,776–$256,225 (2026)
35%: $250,526–$626,350 (2025) | $256,226–$640,600 (2026)
37%: Over $626,350 (2025) | Over $640,600 (2026)

Married Filing Jointly

10%: $0–$23,850 (2025) | $0–$24,800 (2026)
12%: $23,851–$96,950 (2025) | $24,801–$100,800 (2026)
22%: $96,951–$206,700 (2025) | $100,801–$211,400 (2026)
24%: $206,701–$394,600 (2025) | $211,401–$403,550 (2026)
32%: $394,601–$501,050 (2025) | $403,551–$512,450 (2026)
35%: $501,051–$751,600 (2025) | $512,451–$768,700 (2026)
37%: Over $751,600 (2025) | Over $768,700 (2026)

Married Filing Separately

10%: $0–$11,925 (2025) | $0–$12,400 (2026)
12%: $11,926–$48,475 (2025) | $12,401–$50,400 (2026)
22%: $48,476–$103,350 (2025) | $50,401–$105,700 (2026)
24%: $103,351–$197,300 (2025) | $105,701–$201,775 (2026)
32%: $197,301–$250,525 (2025) | $201,776–$256,225 (2026)
35%: $250,526–$375,800 (2025) | $256,226–$384,350 (2026)
37%: Over $375,800 (2025) | Over $384,350 (2026)

Head of Household

10%: $0–$17,000 (2025) | $0–$17,700 (2026)
12%: $17,001–$64,850 (2025) | $17,701–$67,450 (2026)
22%: $64,851–$103,350 (2025) | $67,451–$105,700 (2026)
24%: $103,351–$197,300 (2025) | $105,701–$201,750 (2026)
32%: $197,301–$250,500 (2025) | $201,751–$256,200 (2026)
35%: $250,501–$626,350 (2025) | $256,201–$640,600 (2026)
37%: Over $626,350 (2025) | Over $640,600 (2026)

Please Note: Your marginal rate is the rate applied to the last dollar you earn in a bracket. Your effective rate is your total tax bill divided by your total income. Because early portions of your income are taxed at lower brackets, your effective rate is often lower than your top marginal rate.

Standard Deduction Amounts 2025 vs. 2026

The standard deduction remains the primary way most households reduce taxable income. These amounts were slightly increased for 2026 to reflect cost of living changes:2

Please Note: Additional standard deduction amounts for age 65 or older or blindness also increased. In 2025, the additional amount is $2,000 for Single or Head of Household filers and $1,600 per qualifying person for Married filers. In 2026, those amounts rise to $2,050 and $1,650 per qualifying person, respectively.

Standard Deduction vs. Itemizing: When Each Makes Sense

For many households, the standard deduction is larger than total itemized deductions such as mortgage interest, state and local taxes, and charitable contributions. The simplicity alone makes it the default choice for millions of taxpayers.

Itemizing may still make sense if your deductible expenses exceed your standard deduction. This can apply if you have significant mortgage interest, large state tax payments, high medical expenses, meaningful charitable giving, or if you are a business owner whose deductible expenses materially shift your taxable income. Running both scenarios often provides clarity.

Other Key 2025 to 2026 Inflation Adjustments

Retirement Contribution Limits3

• 401(k), 403(b), 457 plans: $23,500 (2025) | $24,500 (2026)

• 401(k) catch up age 50+: $7,500 (2025) | $8,000 (2026)

• IRA contribution limit: $7,000 (2025) | $7,500 (2026)

• IRA catch up age 50+: $1,000 (2025) | $1,100 (2026)

Health Savings Accounts (HSA)4

• HSA self only: $4,300 (2025) | $4,400 (2026)

• HSA family: $8,550 (2025) | $8,750 (2026)

• HSA catch up age 55+: $1,000 (2025) | $1,000 (2026)

Flexible Spending Accounts (FSA)4

• Health Care FSA salary reduction limit: $3,300 (2025) | $3,400 (2026)

Gift and Estate Tax5

• Annual gift tax exclusion: $19,000 (2025) | $19,000 (2026)

• Lifetime estate exemption: $13.99 million (2025) | $15.00 million (2026)

Does the One Big Beautiful Bill Act (OBBBA) Affect Me?

You might not qualify for every new break under the OBBBA, but there is a good chance someone in your household does. Here are the provisions that tend to matter most during filing and planning, with a quick read on who they fit best:

No Federal Tax on Tips: The OBBBA sets up a new federal income tax deduction (rather than removing tips from wages entirely) for eligible tip income for tax years 2025 through 2028. It can be claimed even when you use the standard deduction, but it’s limited to $25,000 per year and begins phasing out once modified adjusted gross income goes above $150,000 for most filers or $300,000 for joint filers.6

Overtime Pay Deduction for Hourly Workers: For 2025 through 2028, qualified overtime compensation can generate a deduction that may lower taxable income without changing how wages are reported. The annual cap is $12,500 (or $25,000 for joint filers), and wages still appear on your W-2; so the practical impact often shows up at filing time if withholding didn’t anticipate the deduction.The benefit phases out once modified adjusted gross income exceeds $150,000 for most filers or $300,000 for joint filers.7

New $6,000 Senior Deduction: For tax years 2025 through 2028, eligible taxpayers age 65 or older can claim an additional $6,000 deduction per qualifying person (up to $12,000 if married filing jointly and both spouses qualify). The deduction is available to all taxpayers, regardless of whether they itemize or take the standard deduction. However, it is subject to a phase-out for those whose modified adjusted gross income exceeds $75,000 ($150,000 for joint filers).8

SALT Cap Increase and Phase Down Rules: The law raises the cap on state and local tax (SALT) itemized deductions starting in 2025, with an overall limit described as $40,000 (and $20,000 for married filing separately) and a scheduled 1% annual increase through 2029 in some summaries. It then reduces the benefit for higher earners, phasing down for taxpayers above $500,000 of income until the cap effectively falls back to $10,000 at the top end. This tends to matter most for higher-tax-state households who are near the itemize-versus-standard break-even point.9

Child Tax Credit Update: The maximum Child Tax Credit is described as increasing to $2,200 per qualifying child for 2025, with inflation indexing applied after that. The familiar phaseout thresholds are described as staying in place—$200,000 for single filers and $400,000 for joint filers—so the change is mainly about the size of the credit rather than who qualifies.10

Business Owner Adjustment: QBI Deduction Changes: For pass-through owners, the OBBBA is described as locking in the 20% Qualified Business Income deduction on a permanent basis and adding technical adjustments starting in 2026, including a minimum QBI deduction concept for certain taxpayers who have at least $1,000 of QBI from an active qualified trade or business. Because QBI outcomes can shift with timing of revenue, expenses, and estimated payments, these tweaks may affect planning for entity owners and self-employed filers.11

What Tax Moves Can You Still Make in 2026 That Impact Your 2025 Taxes?

If you have not filed yet, there may still be time to reduce your 2025 taxable income. Most tax impacting contributions must be made by the April 15, 2026 filing deadline unless otherwise noted:

Traditional IRA Contributions: You can contribute for 2025 up until April 15, 2026. Deductibility phases out at certain income levels, especially if you or your spouse are covered by a workplace plan, so coordination with 401(k) participation matters before claiming the deduction.

Roth IRA Contributions: Roth contributions for 2025 can also be made until April 15, 2026, subject to income phaseouts. If your income exceeds the limits, a backdoor Roth strategy may still be available, but it requires careful review of existing pre tax IRA balances.

HSA Contributions: Health savings account (HSA) contributions for 2025 can be made until April 15, 2026 and remain an above the line deduction. HSAs offer a triple tax advantage because contributions are deductible, growth is tax deferred, and qualified withdrawals are tax free.

SEP IRA Contributions for Business Owners: SEP contributions can generally be made up until your tax filing deadline, including extensions. This creates flexibility for self employed individuals who want to adjust retirement savings after seeing their final profit numbers.

Solo 401(k) Contributions: Employee deferrals must have been elected by December 31st, 2025, but employer contributions can typically be funded up until the filing deadline, including extensions. This structure allows for meaningful last minute tax planning for profitable businesses.

Common Deductions and Credits People Often Overlook

Even careful filers miss smaller line items that quietly reduce taxable income or increase credits. These are some of the most commonly overlooked opportunities:

HSA Contributions Made Outside Payroll: Contributions made directly to your HSA outside of payroll still qualify for a deduction. Many taxpayers forget to report these if they only look at their W-2 totals.

Charitable Contributions, Including Non Cash Gifts: Cash donations, donor advised fund contributions, and non cash gifts such as clothing or appreciated securities may all qualify. Proper receipts and documentation are essential, especially for larger amounts.

Energy Efficient Home Credits: Certain improvements such as qualifying HVAC systems, insulation, or energy efficient windows may generate credits rather than deductions. Credits directly reduce tax owed, which makes them especially valuable.

Dependent Care Credit: If you paid for childcare so you could work or look for work, you may qualify for a credit based on a percentage of eligible expenses. Income levels and employer provided benefits can affect the calculation.

Self Employment Adjustments: Self employed taxpayers may deduct health insurance premiums, claim a home office deduction if eligible, and deduct half of self employment tax. These adjustments reduce adjusted gross income, which can also influence other tax calculations.

Don’t Just File — Build a Tax Strategy for Next Year

Tax season is more than a deadline. It is a chance to review what changed, understand what applied to you, and identify where small adjustments could make a meaningful difference. Filing with clarity today can set the tone for smarter decisions this year.

Our team helps clients move beyond simply submitting returns. We review income trends, bracket positioning, retirement contributions, and withholding strategies to help reduce surprises and improve coordination between tax and investment decisions.

If you want a second set of eyes before you file or a proactive plan for the year ahead, we would be glad to help you build it. Schedule a complimentary consultation with our team to review your return and map out a more intentional tax strategy for the year ahead.