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What changed for 2025 and 2026

The 2025 tax law (often called the One Big Beautiful Bill Act, and by the IRS the Working Families Tax Cuts) changed a lot at once. Here are the changes most people will notice, in one place.

Covers federal changes for the 2025 tax year (returns filed in 2026) and the 2026 tax year (returns filed in 2027). This page is reviewed every year.

For your 2025 return

Bigger standard deduction$15,750 for single filers, $31,500 for married couples filing jointly and $23,625 for heads of household.Deductions →
Tax brackets made permanentThe seven rates from 10% to 37% no longer have an end date. The income ranges still adjust for inflation every year.See the brackets →
Child tax credit up to $2,200Per qualifying child under 17, with up to $1,700 refundable. A valid Social Security number is required.Credits →
Four new deductions on Schedule 1-AQualified tips, qualified overtime, interest on loans for new U.S.-assembled cars, and an extra $6,000 deduction for people 65 or older. Each has limits and runs through 2028.How they work →
Higher SALT capThe cap on deducting state and local taxes rises to $40,000, shrinking for incomes over $500,000.Deductions →
Form 1040 renumberedAGI is now on line 11a and the deduction on line 12e. A new line 13b holds the Schedule 1-A deductions.Forms & schedules →
1099-K back to $20,000Payment apps and marketplaces send a 1099-K only above $20,000 and 200 transactions. Income below that still has to be reported.Side hustle guide →
Trump AccountsA new savings account for children. Eligible children born from 2025 through 2028 can get a one-time $1,000 deposit by electing it on Form 4547.New parent guide →
Part of the adoption credit is refundableUp to $5,000 of the adoption credit can now be paid to you even if you owe no tax.Credits →
Energy and electric vehicle credits endingVehicle credits ended for cars acquired after September 30, 2025. Home energy credits end for work done after December 31, 2025.Credits →

Starting with 2026

Standard deduction rises again$16,100 for single filers, $32,200 for married couples filing jointly and $24,150 for heads of household.
Charitable deduction without itemizingUp to $1,000 ($2,000 if married filing jointly) of cash gifts to qualifying charities, even if you take the standard deduction.Deductions →
New floor for itemized charityIf you itemize, only charitable gifts above 0.5% of your AGI count.Deductions →
Mortgage insurance deductible againPMI and similar premiums count as mortgage interest for people who itemize, with income limits.Deductions →
Bigger child care creditThe child and dependent care credit rate rises to as much as 50% for lower incomes, and the limit for employer dependent care accounts rises to $7,500.Credits →
Gambling losses limitedOnly 90% of gambling losses can be deducted, up to winnings.
Educator expensesThe above-the-line deduction rises to $350, and extra classroom costs can be itemized.
Top-bracket limit on itemizingPeople in the 37% bracket get a smaller benefit from itemized deductions.
1099-NEC threshold rises to $2,000Businesses send a 1099-NEC for 2026 payments of $2,000 or more, instead of $600.Side hustle guide →
New W-2 reporting for tips and overtimeStarting with 2026 W-2s, qualified tips and overtime get their own reporting, which makes the new deductions easier to figure.W-2 guide →

State changes

Several states cut their income tax rates for 2026, and some changed rates during the year. Georgia, for example, cut its flat rate to 4.99% retroactive to January 1, 2026. States don't automatically follow federal changes like the new Schedule 1-A deductions. See the state tax map and check your state's department of revenue.

Sources

Last updated: November 14, 2026

This page was written from the sources below. Official sources are from the IRS or another government body; secondary sources are tax publications used to cross-check new rules. Tax law changes, so always confirm with the official source for the year you're filing.