2026 Tax Season: Key Changes Explained by Financial Analyst Stephen Kates

Tax Law Adjustments for 2026

• 📄 The "one big beautiful bill" signed by President Trump has led to adjustments and extensions of the original 2017 Tax Cuts and Jobs Act.
• 💰 The standard deduction will be larger for most taxpayers this year.
• 🏙️ For New Yorkers, the State and Local Tax (SALT) deduction has increased from $10,000 to $40,000, a benefit expected to last until 2029.

Changes for Parents and Tip Earners

• 👨‍👩‍👧‍👦 Child care tax credits have seen a slight increase of about $200, with refundable amounts up to approximately $1,700.
• 💸 For individuals paid in tips or overtime, there are adjustments related to job definitions and potential income phase-outs.
• 💡 The "no tax on tips" provision applies to cash tips up to $25,000, but strict definitions and employment standards, along with income limitations, will affect eligibility.

Inflation Adjustments and Retirement Contributions

• 📊 The IRS has released new federal income tax brackets with inflation adjustments for standard deductions.
• 📈 While income thresholds across tax brackets (10% to 37%) have seen modest increases, there are no significant adjustments to retirement contribution limits.

Filing Your Return

• ⏳ The IRS is currently overwhelmed, so it is encouraged to file as early as possible.
• ✅ Filing early does not necessarily mean a delayed refund; getting paperwork together and understanding the new tax changes can help ensure timely and accurate filing.
• 🧑‍💼 If unsure about tax situations or how changes may impact returns, consulting an accountant or CPA is recommended to avoid mistakes and potential audits.