What's new for your 2026 taxes

The 2025 tax law changes a lot on the return you'll file in spring 2027. Most of it helps. Here's what to know, and what to do before December 31.

New breaks

• Standard deduction: $16,100 single, $32,200 married filing jointly.

• Charity without itemizing: deduct up to $1,000 of cash gifts ($2,000 married). Gifts to donor-advised funds don't count. Keep the receipts.

• No tax on tips: deduct up to $25,000 of tips, for income under $150,000 ($300,000 married).

• No tax on overtime: deduct the extra half of overtime pay, up to $12,500 ($25,000 married), same income limits. Colorado adds overtime back on your state return starting in 2026.

• Car loan interest: deduct up to $10,000 a year on a new, US-assembled car bought for personal use with a loan after 2024, for income under $100,000 ($200,000 married).

• Age 65 or older: an extra $6,000 deduction per person, phasing out above $75,000 of income ($150,000 married).

• Child tax credit: $2,200 per child under 17 with a Social Security number.

• Trump accounts: $1,000 from the government for babies born 2025 through 2028, and families can add up to $5,000 a year.

• State and local tax deduction cap: $40,400 if you itemize, shrinking once income passes $505,000.

• Dependent care FSA: the limit rises to $7,500.

Changes that can cost you

Marketplace health insurance: the extra premium help ended December 31, 2025. For 2026 coverage, household income over 400% of the poverty line ($62,600 single, $128,600 for a family of four) means losing all of your premium credit, and there's no longer a cap on paying it back. If you're close to the line, a retirement or HSA contribution can bring you under.

Itemizers giving to charity: the first 0.5% of your income in gifts no longer counts.

Before December 31

• Give to charity in cash or by check.

• Max out your 401(k) at work: $24,500 for 2026, plus $8,000 if you're 50 or older.

• Sell investments that are down to offset gains you've already taken.

• On a Marketplace plan, check your income against the cliff above.

• IRA contributions (up to $7,500) and HSA contributions (up to $4,400 single or $8,750 family) can wait until April 15, 2027.

Questions about your situation? Book a free consultation from the home page. This page is general information, not advice for your situation.