02/11/2026
Major Changes for the 2026 Tax Filing Season
The One Big Beautiful Bill Act (OBBBA) – Major Tax Law Changes
The most significant development for the 2026 tax filing season is the One Big Beautiful Bill Act, signed into law on July 4, 2025. Many provisions are retroactive to January 1, 2025, meaning taxpayers can claim these new deductions and credits when filing their 2025 tax returns in early 2026.
Key retroactive tax provisions include:
New Deductions for Workers
No Tax on Tips: Qualified tip income is now tax-free for many workers in the service industry
No Tax on Overtime: Certain qualified overtime pay is exempt from federal income tax
Car Loan Interest Deduction: Up to $10,000 deductible for interest on loans for new, U.S.-assembled vehicles
100% Bonus Depreciation: Available for businesses on qualified property
Expanded Benefits for Seniors (Age 65+)
$6,000 Senior Deduction: Additional deduction for taxpayers 65 and older (2025-2028)
Phases out starting at $75,000 MAGI (single) and $150,000 MAGI (joint filers)
Additional Standard Deduction: $2,050 for single filers, $1,650 for joint filers (on top of the $6,000 senior deduction)
Increased Standard Deduction
For 2025 Tax Returns (filed in 2026):
Single Filers: $15,750 (increase of $750 from 2024)
Married Filing Jointly: $31,500 (increase of $1,500 from 2024)
Heads of Household: $23,625 (increase of $1,125 from 2024)
For 2026 Tax Returns (filed in 2027): According to the IRS:
Single Filers: $16,100
Married Filing Jointly: $32,200
Heads of Household: $24,150
Enhanced Child Tax Credit
Maximum Child Tax Credit: $2,200 per child (up from prior amounts)
Refundable Portion: $1,700 per child for 2026
SALT Deduction Cap Increase
State and Local Tax (SALT) Deduction: Cap raised to $40,000 (up from the previous $10,000 limit that was in place from 2018-2024)
Form 1099-K: Payment Card & Third-Party Network Transaction
MAJOR CHANGE: The 1099-K threshold has reverted to the original higher threshold under the OBBBA.
For 2025 and Beyond:
Third-party payment platforms (PayPal, Venmo, Cash App, etc.) are only required to send Form 1099-K if you received payments for goods or services totaling $20,000 OR MORE and had 200 or more transactions
This is a significant change from the previously planned lower thresholds ($5,000 for 2024, $2,500 for 2025, $600 for 2026)
The threshold applies to each platform individually - transactions across multiple platforms are not combined
Form 1099-K must be sent by January 31
Important Note: Whether or not you receive a Form 1099-K, you must still report all taxable income on your tax return.
Form 1099-NEC and 1099-MISC Changes
Starting in 2026 (for tax year 2026):
Reporting threshold increases from $600 to $2,000
This applies to Form 1099-NEC (nonemployee compensation) and Form 1099-MISC (miscellaneous income)
The threshold will be adjusted annually for inflation starting in 2027
For the 2025 tax year (filing in 2026), the old $600 threshold still applies
Direct File Program Discontinued
Critical Update: IRS Direct File will not be available for the 2026 tax filing season and has been closed indefinitely.
Direct File was the free, government-run online tax filing tool that allowed eligible taxpayers in 25 states to file directly with the IRS. Nearly 300,000 taxpayers used it during the 2025 filing season.
What This Means for You:
Taxpayers who previously used Direct File will need to use alternative filing methods
Former Direct File users can no longer access prior returns through the Direct File portal
Access your tax information through your IRS Online Account or request transcripts by mail
Free Filing Alternatives: Several free options remain available:
IRS Free File: Available for taxpayers with adjusted gross income under $84,000
Partnership with private tax software companies
State filing may not be free
Free File Fillable Forms: Available to all income levels, but requires manual completion
VITA (Volunteer Income Tax Assistance): Free help for those making under $67,000, elderly, disabled, or limited English speakers
TCE (Tax Counseling for the Elderly): Free tax help for seniors
MilTax: Free for military members, eligible family members, and first-year veterans
IRS Eliminates Paper Refund Checks
New Requirement: The IRS will no longer issue paper refund checks. Direct deposit is now mandatory.
For Those Without Bank Accounts:
Prepaid debit cards are available (watch for fees)
Digital wallets may be an option
Paper checks will only be sent if no alternative is available
Note: In the 2025 filing season, 93% of refunds were already issued via direct deposit.
How to Get Your 2026 Tax Refund as Fast as Possible
The sooner you file, the sooner you'll get your refund.
The IRS expects to receive around 164 million tax returns in 2026. Most of these tax returns will likely be filed in mid-March through the April 15th deadline. If you file your tax returns during this time, your tax refund may be delayed due to the sheer number the IRS has to process.
