Maximize Your Tax Refund in 2026: 5 Deductions Your Virtual Tax Preparer Should Find (But Might Not)

Tax season 2026 brings a wave of new deductions that could put thousands of dollars back in your pocket. The problem? Many virtual tax preparers and automated software platforms haven't fully updated their systems to catch these opportunities.

The "One Big Beautiful Bill" legislation created several significant tax breaks for 2025 returns filed in 2026. An estimated $60 billion in retroactive refunds is expected to be issued this year. That's real money leaving the table if your tax preparer isn't paying attention.

Here are five deductions your virtual tax preparer should find: but might miss if you're not working with someone who knows what to look for.

1. Qualified Tip Income Deduction: Up to $25,000!

This is a game-changer for service industry workers. If you earned tips in 2025, you can deduct up to $25,000 annually on your 2026 return.

Who qualifies:

• Restaurant servers and bartenders
• Beauticians and estheticians
• Rideshare and delivery drivers
• Hotel staff and valets
• Any service worker who received tips

The deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers). Tax Policy Center estimates show this provides an average tax cut of around $1,400 for eligible filers.

Action required: Make sure your tax preparer has access to all your tip income documentation. This includes Form W-2 reporting and any records of cash tips you maintained throughout the year. Many automated systems may not prompt you to claim this deduction, so raise it proactively.

2. Overtime Pay Deduction: Don't Miss the Premium Portion!

Working extra hours in 2025? You can now deduct the premium portion of your overtime pay: that's the "half" in "time-and-a-half."

Maximum deduction amounts:

• $12,500 for individual filers
• $25,000 for married couples filing jointly

Approximately 17 million taxpayers are expected to claim this deduction in 2026, with an average tax cut of about $1,400. The overtime must be clearly documented on your Form W-2 or other official pay records.

Critical point: Your tax preparer needs to calculate the differential between your regular rate and overtime rate. This isn't a simple entry: it requires understanding your pay structure. Generic tax software may not walk you through this calculation properly.

3. Increased SALT Deduction: $40,000 Cap for Middle Earners!

The state and local tax (SALT) deduction cap has increased significantly for 2026. If you itemize deductions, you can now deduct up to $40,000 in state and local taxes if you earn up to $500,000.

This matters most if you live in high-tax states and previously hit the old $10,000 cap. Taxpayers in this category could see tax cuts ranging from hundreds to several thousand dollars.

Key considerations:

• You must itemize to claim this deduction
• Calculate whether itemizing beats your standard deduction
• Include property taxes, state income taxes, and local taxes
• Keep all documentation for state and local tax payments

Many virtual tax preparers default to the standard deduction. Make sure yours runs the numbers both ways to maximize your refund.

4. Additional Senior Deduction: $6,000 Extra if You're 65+!

If you're age 65 or older, you qualify for an additional $6,000 deduction on top of your standard deduction for tax years 2025-2028. Married couples where both spouses qualify can claim $12,000 combined.

This deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

Why it gets missed: Some tax software automatically applies age-based deductions, but not all virtual preparers verify eligibility for this specific provision. If you turned 65 in 2025, double-check that your preparer claimed this deduction.

Documentation needed: Verify your birthdate is correctly entered in your tax profile. This deduction should apply automatically once age is confirmed, but human oversight ensures nothing falls through the cracks.

5. Enhanced Child Tax Credit: More Money for Families!

The Child Tax Credit has been expanded for parents with children under 17. The exact benefit varies based on your income and number of qualifying children.

Critical requirement: Your children must have Social Security numbers on file before you file your return. This is where families run into trouble. Virtual preparers may not flag missing or incorrect SSNs until after submission, which delays your refund or disqualifies you from the credit entirely.

Steps to take now:

1. Verify each child's Social Security number is correct
2. Confirm your children's ages qualify them for the credit
3. Update any name changes due to marriage, adoption, or other circumstances
4. Provide all documentation to your tax preparer upfront

The enhanced credit can mean thousands of dollars in additional refunds or reduced tax liability. Don't let a simple documentation error cost you this money.

Bonus Overlooked Provisions: Two More to Check!

Qualified Business Income Deduction (QBI)

The 20% Qualified Business Income deduction is now permanent. If you're self-employed, own a small business, or earn income as an independent contractor, you may qualify to deduct up to 20% of your qualified business income.

Many virtual tax preparers fail to maximize this deduction because it requires detailed knowledge of your business structure and income sources.

Partially Refundable Adoption Credit

Families who adopted in 2025 can claim up to $5,120 as a refundable credit. This means you can receive a refund even if you owe no federal income tax.

Adoption credits are complex. Make sure your tax preparer understands the difference between refundable and non-refundable portions of this credit.

Why These Deductions Get Missed by Virtual Tax Preparers

Virtual tax preparation services and DIY software rely on algorithms and user input. They're excellent for straightforward returns, but they have limitations:

• Limited human review: Software prompts only cover common scenarios
• Outdated programming: New legislation takes time to integrate fully
• User error: You must know what to report and where to enter it
• No proactive optimization: Software won't dig through your documents looking for deductions

A concierge tax pro or experienced tax preparer reviews your entire financial picture and asks targeted questions to uncover every deduction you qualify for.

What to Do Right Now

Step 1: Gather all income documentation (W-2s, 1099s, tip records, overtime statements)

Step 2: Review your situation against these five deductions

Step 3: Ask your tax preparer specifically about each applicable deduction

Step 4: Don't assume software will catch everything: verify manually

Step 5: Consider switching to a tax preparation service that specializes in maximizing refunds

The Bottom Line

Tax laws changed significantly for 2025 returns. An estimated 5-10 million taxpayers will claim the tip income deduction alone. Millions more qualify for overtime, SALT, senior, and child tax credit enhancements.

If you're using a virtual tax preparer or automated software, you need to be proactive. These deductions won't find themselves. Ask questions, provide complete documentation, and verify your preparer knows about these provisions.

At Jose's Tax Service, we stay current on every tax law change to maximize your refund. We review returns manually and ask the right questions to ensure you're not leaving money on the table.

Ready to maximize your tax refund in 2026? Contact us today to schedule your consultation and discover what you might be missing.