Maximize Your Tax Refund in 2026: 7 Mistakes You’re Making (and How to Fix Them)

NEW HAVEN, CT – JOSE'S TAX SERVICE – FEBRUARY 24, 2026

The 2026 tax season is officially underway, and for residents in New Haven and across the country, the stakes have never been higher. With significant shifts in the tax code taking effect this year, many taxpayers are still filing as if it were 2024. This inertia is costing the average filer thousands of dollars in unclaimed refunds.

At Jose's Tax Service, we see the same errors repeated every February. Whether you are a W-2 employee, a freelancer, or a small business owner, your goal remains the same: to maximize your tax refund while staying fully compliant with the Internal Revenue Service (IRS). To help you navigate these waters, we have identified the seven most common mistakes taxpayers are making in 2026 and provided the exact steps needed to correct them.

1. Defaulting to the Standard Deduction Without a Comparison

For several years, the standard deduction was so high that itemizing became a rarity for the average household. However, the 2026 tax landscape has shifted. Specifically, the state and local tax (SALT) cap has seen adjustments that make itemizing a viable: and often superior: path for homeowners in high-tax areas like Connecticut.

How to Fix It:

Do not simply check the "Standard Deduction" box on your Form 1040. Instead, aggregate your expenses for the 2025 tax year.

• Calculate your mortgage interest, property taxes, and state income taxes.
• Total your charitable contributions (including non-cash donations).
• Evaluate medical and dental expenses that exceed 7.5% of your Adjusted Gross Income (AGI).

If your total itemized deductions exceed the 2026 standard deduction threshold, you must file Schedule A (Form 1040). Failure to perform this comparison is a primary reason taxpayers leave money on the table.

2. Overlooking New 2026 "Working Class" Deductions

One of the most significant changes in 2026 is the introduction of specialized deductions for overtime pay and tips. These provisions were designed to provide relief to the workforce but are frequently missed by those using basic DIY software that hasn't been updated for these specific New Haven economic nuances.

How to Fix It:

• Review your W-2s and pay stubs specifically for overtime hours. Certain portions of overtime pay may now be eligible for a partial exclusion from taxable income under the 2026 updates.
• Report all tip income accurately but ensure you are applying the new "Tip Tax Credit" if you are an employer, or the relevant income exclusions if you are a service worker.
• Claim vehicle expenses if you are an educator or a tradesperson. The per-mile rate has been adjusted; ensure you are using the most current IRS-approved rate for all business-related travel.

3. Underfunding Your Tax-Advantaged Accounts

A common misconception is that once December 31 passes, you can no longer lower your tax bill for the previous year. This is incorrect. You have until the filing deadline: typically April 15, 2026: to contribute to specific accounts that directly reduce your taxable income.

How to Fix It:

• Contribute to a Traditional IRA: Every dollar put into a traditional IRA (up to the annual limit) can reduce your AGI, potentially dropping you into a lower tax bracket.
• Maximize HSA Contributions: If you have a high-deductible health plan (HDHP), contributing to a Health Savings Account (HSA) is one of the few "triple tax-advantaged" moves available. The contributions are tax-deductible, the growth is tax-free, and withdrawals for medical expenses are tax-free.

Check your eligibility for these contributions at josestaxservice.com to ensure you don't miss the deadline.

4. Miscalculating Refundable vs. Non-Refundable Credits

Tax credits are more valuable than deductions because they reduce your tax liability dollar-for-dollar. However, many taxpayers in New Haven confuse the Child Tax Credit (CTC) with the Earned Income Tax Credit (EITC) or forget to claim education credits like the American Opportunity Tax Credit (AOTC).

How to Fix It:

• Verify Eligibility: Use Form 8812 to calculate the refundable portion of the Child Tax Credit.
• Claim Education Expenses: If you or your dependents were in college in 2025, gather Form 1098-T. The AOTC can provide a credit of up to $2,500, with a portion of it being refundable even if you owe zero taxes.
• Double-check Dependent Care: If you paid for childcare so you could work, ensure you file Form 2441.

5. Ignoring Income Timing Opportunities

If you are a freelancer or a small business owner, the timing of when you receive a check can drastically change your tax liability. Many taxpayers accidentally "bunch" their income into a single year, which pushes them into a higher marginal tax bracket.

How to Fix It:

While the 2025 year has closed, you can apply these "Income Timing" strategies for the 2026 calendar year right now:

• Defer Bonuses: If you expect to be in a lower bracket next year, ask to receive bonuses in January rather than December.
• Accelerate Expenses: If you need new equipment for your business, purchasing it before the end of the tax year can provide an immediate deduction via Section 179.

Strategic tax planning is not a once-a-year event; it requires a concierge tax pro who monitors these shifts year-round.

6. Maintaining Inadequate Documentation

The IRS has increased its enforcement budget for 2026, meaning audits and "soft letters" (inquiries) are on the rise. If you claim a deduction but cannot produce a receipt, the IRS may disallow the deduction and apply a 20% accuracy-related penalty.

How to Fix It:

• Digitize Everything: Stop relying on a shoebox of receipts. Use a scanning app to archive all business and medical receipts.
• Separate Accounts: Never commingle personal and business funds. This is the first thing an auditor looks for.
• Keep Records for 3 Years: The general statute of limitations for an IRS audit is three years, but keeping records for seven years is a safer professional standard.

If you have lost records, you may need to request a tax transcript using Form 4506-T. For help with professional record-keeping, visit our tax planning resources.

7. The "DIY Software" Delusion

The biggest mistake you can make in 2026 is assuming that a $50 software package can replace a human expert. Software is designed for the "average" user, but very few people have a truly "average" life. Software often misses the nuance of New Haven-specific property tax rebates or complex self-employment structures.

How to Fix It:

Move beyond automated algorithms. A concierge tax pro at Jose's Tax Service does more than just data entry; we perform a comprehensive review of your financial life to find the "hidden" money that software misses.

When you search for tax preparation New Haven, you aren't just looking for someone to fill out forms: you’re looking for a partner to protect your wealth.

Actionable Steps for a Successful Filing:

1. Gather your documents: Collect all W-2s, 1099s, and 1098s by the end of February.
2. Schedule an appointment: Don't wait until April. Early filing leads to faster refunds and less stress.
3. Review the 2026 changes: Familiarize yourself with the new overtime and SALT rules mentioned above.
4. Consult a professional: If your tax situation involves a home, a business, or children, professional guidance is no longer optional: it’s essential.

Jose's Tax Service is committed to helping the New Haven community navigate the complexities of the 2026 tax year. Our approach is matter-of-fact: we find the deductions, we apply the credits, and we maximize your tax refund.

For more information or to book your concierge tax session, visit josestaxservice.com/wp-sitemap-posts-post-1.xml to see our latest updates or contact us directly at our New Haven office.

Deadline Reminder: The deadline to file your 2025 tax return (or an extension) is Wednesday, April 15, 2026. Failure to file on time may lead to late-filing penalties of 5% of the unpaid taxes for each month or part of a month that a tax return is late.

Disclaimer: This blog post provides general information and should not be construed as legal or specific financial advice. Tax laws are subject to change, and individual circumstances vary. Always consult with a qualified tax professional regarding your specific situation.