Taxes
Federal tax brackets, deductions, credits, and the 2026 changes from the One Big Beautiful Bill Act.
U.S. federal income tax is governed by the Internal Revenue Code, administered by the IRS, and adjusted each year for inflation. The 2026 tax year is unusual: the One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025) created several new deductions on top of the regular inflation adjustments — a $25,000 deduction on tips, a $12,500 deduction on overtime, a $6,000 senior deduction for filers 65 and older, and a $10,000 deduction on auto loan interest. All four phase out above specific income thresholds and apply to tax years 2025 through 2028.
Key laws
Key agencies and resources
Important deadlines and limits
| Federal tax filing deadline (tax year 2025) | April 15, 2026 |
| Extension request deadline | April 15, 2026 (Form 4868); pushes filing to October 15, 2026 |
| Quarterly estimated tax payments | April 15, June 15, September 15, January 15 |
| 2026 standard deduction (single) | $16,100 |
| 2026 standard deduction (MFJ) | $32,200 |
| Top 2026 tax bracket threshold (single) | $640,600 |
| Top 2026 tax bracket threshold (MFJ) | $768,700 |
All taxes questions (15)
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Can I deduct auto loan interest in 2026?
Yes, for the first time since the 1980s. The One Big Beautiful Bill Act created a federal deduction of up to $10,000 per year on interest paid on qualifying personal-use vehicle loans for tax years 2025 through 2028. The vehicle must be new (you must be the original user), have a gross weight rating under 14,000 pounds, undergo final assembly in the United States, and be financed by a loan originated after December 31, 2024. The deduction phases out for modified adjusted gross income above $100,000 (single) or $200,000 (married filing jointly).
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Can I deduct my home office on my taxes?
You can deduct a home office only if you are self-employed and use the space regularly and exclusively for business. Employees who work from home cannot take the deduction. Use the simplified method ($5 per square foot, up to 300 sq ft) or the regular method based on actual expenses.
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How do I file taxes for the first time?
First-time filers need to choose a filing status, gather income documents (W-2, 1099), decide how to file (free software, tax pro, or paper), and submit by April 15. Most first-time filers qualify for free filing through IRS Free File.
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How do I pay estimated quarterly taxes?
If you expect to owe $1,000 or more in federal taxes that won't be covered by withholding, you must pay estimated taxes quarterly — due April 15, June 16, September 15, and January 15. Use IRS Form 1040-ES or pay online through IRS Direct Pay.
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What are the 2026 federal tax brackets?
The U.S. uses seven progressive federal tax brackets for 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Brackets are inflation-adjusted from 2025 and remain at the rates set by the Tax Cuts and Jobs Act of 2017, which the One Big Beautiful Bill Act made permanent. Your top bracket is your marginal rate — the rate on your last dollar — not the rate on your entire income.
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What is a flexible spending account (FSA)?
A flexible spending account (FSA) is an employer-sponsored benefit that lets you set aside pre-tax dollars for eligible healthcare or dependent care expenses. The 2025 health FSA limit is $3,300. Unlike an HSA, FSA funds generally don't roll over year to year — use them or lose them.
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What is the capital gains tax rate for 2026?
Long-term capital gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on your income. Short-term gains are taxed as ordinary income. Most middle-income earners pay 15% on long-term gains.
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What is the child tax credit for 2026?
The child tax credit for 2026 is $2,000 per qualifying child under age 17. Up to $1,700 is refundable (the additional child tax credit). It begins phasing out at $200,000 of modified AGI for single filers and $400,000 for married filing jointly.
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What is the difference between a W-2 and a 1099?
A W-2 is issued by employers and reports wages with taxes already withheld. A 1099 is issued by clients or payers for freelance, contract, or investment income, with no withholding — meaning you owe self-employment tax and must pay estimated taxes quarterly.
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What is the gift tax exclusion for 2026?
The annual gift tax exclusion for 2026 is $19,000 per recipient (up from $18,000 in 2025). You can give up to $19,000 to any number of people without filing a gift tax return. Amounts above the exclusion count against your lifetime exemption of $13.99 million.
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What is the new $6,000 senior deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of $6,000 per eligible filer ($12,000 for couples where both spouses are 65 or older) for tax years 2025 through 2028. It is available whether you itemize or take the standard deduction, but phases out for modified adjusted gross income above $75,000 (single) or $150,000 (married filing jointly). It is in addition to — not a replacement for — the existing extra standard deduction for filers over 65.
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What is the no-tax-on-overtime deduction for 2026?
The One Big Beautiful Bill Act created a federal deduction of up to $12,500 per taxpayer ($25,000 for joint filers) on the qualifying overtime portion of wages — the half-time premium above your regular pay rate, not your full overtime hours. The deduction phases out for MAGI above $150,000 (single) or $300,000 (married filing jointly), applies to tax years 2025 through 2028, and only counts overtime required by the Fair Labor Standards Act.
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What is the no-tax-on-tips deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of up to $25,000 per taxpayer on qualified tip income for tax years 2025 through 2028. The deduction is available whether you itemize or take the standard deduction, but phases out for taxpayers with modified adjusted gross income above $150,000 (single) or $300,000 (married filing jointly), and applies only to occupations the IRS designates as customarily and regularly tipped.
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What is the standard deduction for 2026?
The federal standard deduction for tax year 2026 is $16,100 for single filers and married filing separately, $24,150 for head of household, and $32,200 for married filing jointly. These amounts are inflation-adjusted from 2025 and were made permanent by the One Big Beautiful Bill Act, which prevented the scheduled reversion to lower pre-2018 levels. Filers age 65 or older receive an additional standard deduction on top of these amounts.
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When is the tax filing deadline?
The federal income tax filing deadline is April 15 of the year after the tax year — so April 15, 2027 for your 2026 taxes. Filing Form 4868 by that date gives you a 6-month extension to October 15, but any taxes owed are still due April 15 to avoid penalties.