Standard Deduction Changes Explained in Under 3 Minutes: Will Your 2026 Refund Be Bigger?

February 28, 2026 • Giveaways

Categories: news, tax planning

NEW HAVEN, CONNECTICUT – JOSE’S TAX SERVICE – FEBRUARY 28, 2026

The Internal Revenue Service (IRS) has officially released the inflation-adjusted figures for the 2026 tax year. For New Haven residents and small business owners, these adjustments represent a critical component of annual financial planning. Understanding how the standard deduction operates is the first step in determining your potential tax liability or refund size for the upcoming filing season.

At Jose’s Tax Service, we prioritize clear communication regarding these technical shifts. While the numbers have increased, the impact on your specific bank account depends on several variables, including your filing status and your total annual withholding.

THE NEW 2026 NUMBERS ARE HERE!

For the 2026 tax year, the standard deduction has seen a moderate increase across all filing categories. This adjustment is designed to keep pace with inflation, ensuring that taxpayers do not face a higher tax burden simply because of cost-of-living increases.

The specific amounts for 2026 are as follows:

Single Filers: $16,100 (An increase of $350 from 2025).
Married Filing Jointly: $32,200 (An increase of $700 from 2025).
Head of Household: $24,150 (An increase of $525 from 2025).
Married Filing Separately: $16,100 (An increase of $350 from 2025).

UNDERSTAND THE IMPACT ON YOUR TAXABLE INCOME!

It is essential to distinguish between a "deduction" and a "refund." A deduction reduces the amount of your income that is subject to federal income tax. For example, if you are a single filer in New Haven earning $60,000 a year, the $16,100 standard deduction effectively reduces your taxable income to $43,900.

Follow these steps to estimate your taxable income:

Calculate your total gross income for the 2026 calendar year.
Identify your filing status (Single, Joint, etc.).
Subtract the corresponding 2026 standard deduction amount.
Review any additional "Above-the-Line" deductions you may qualify for, such as student loan interest or educator expenses.

Lowering your taxable income generally leads to a lower total tax bill. However, whether this results in a "bigger refund" depends entirely on your withholding. If your employer’s payroll department has already adjusted your tax withholding to account for these higher deductions, your refund may stay the same while your take-home pay increases slightly throughout the year.

EXTRA DEDUCTIONS FOR SENIORS AND THE BLIND!

Taxpayers who are age 65 or older, or those who are legally blind, are entitled to an additional standard deduction amount. This is a critical provision for many of our long-term clients in the New Haven area who are navigating retirement.

For the 2026 tax year:

Single or Head of Household: You may claim an additional $2,050.
Married (Filing Jointly or Separately): You may claim an additional $1,650 per qualifying spouse.

If you are both 65+ and legally blind, you are permitted to double these additional amounts. For a married couple where both spouses are over 65, this adds a significant $3,300 to your total standard deduction, bringing the total to $35,500.

ITEMIZING VS. STANDARD DEDUCTION IN NEW HAVEN!

A common question we receive at Jose’s Tax Service is whether a client should itemize their deductions or take the standard deduction. With the 2026 standard deduction reaching $16,100 for individuals, the "bar" for itemizing is higher than ever.

You should consider itemizing on Schedule A (Form 1040) only if your total allowable expenses exceed the standard deduction amounts listed above. Common itemized deductions include:

State and Local Taxes (SALT): This includes Connecticut state income tax and New Haven property taxes (capped at $10,000).
Mortgage Interest: Interest paid on up to $750,000 of mortgage debt.
Charitable Contributions: Donations made to 501(c)(3) organizations.
Medical and Dental Expenses: Only the portion that exceeds 7.5% of your Adjusted Gross Income (AGI).

For many New Haven homeowners, the $10,000 SALT cap makes it difficult to exceed the $32,200 joint standard deduction through property taxes alone. However, if you have high medical bills or significant charitable giving, itemizing may still be the superior strategy. Visit our Small Business Learning Center for more detailed breakdowns of business-related deductions.

ACTIONABLE STEPS TO MAXIMIZE YOUR 2026 REFUND!

To ensure you receive the maximum benefit from these changes, you must take proactive steps. Do not wait until April 2027 to evaluate your 2026 tax position.

Update Form W-4: Contact your employer's HR department to update your Employee's Withholding Certificate. If you want a larger refund at the end of the year, you may choose to have more tax withheld now.
Monitor Your Paystubs: Verify that the amount of federal tax being withheld aligns with your expected annual liability.
Track Charitable Receipts: Keep a digital or physical folder for all donations made throughout New Haven. Even if you don't itemize this year, having the records is vital for future planning.
Consult a Professional: Use a local expert who understands Connecticut’s specific tax climate.

At Jose’s Tax Service, we offer personalized service that software-only options cannot match. We look at your total financial picture to ensure no credits or deductions are overlooked. Our competitive rates ensure that professional tax help is accessible to everyone in the community.

WHY LOCAL EXPERTISE MATTERS IN NEW HAVEN!

National tax chains often treat taxpayers like a number in a queue. Jose' Morales, CEO and lead tax pro, takes a different approach. We understand the local economy: from the side hustlers in Fair Haven to the small business owners in Westville.

The 2026 standard deduction changes are just one piece of the puzzle. When you file with us, we analyze:

Earned Income Tax Credit (EITC) eligibility.
Child Tax Credit (CTC) updates.
Connecticut-specific tax credits.
Business expense optimization.

For more information on our services, visit our homepage or explore our post archives to see how we have helped clients navigate previous tax law changes.

CRITICAL DEADLINES AND REMINDERS!

April 15, 2026: This is the primary deadline to file your 2025 tax return. However, the planning for your 2026 return (which uses the new standard deduction numbers discussed here) begins now.
Quarterly Estimated Payments: If you are self-employed or a small business owner in New Haven, your first quarterly payment for the 2026 tax year is due in mid-April. Ensure your payments reflect the new deduction amounts to avoid underpayment penalties.

WARNING: Failure to adjust your withholding or estimated payments in response to income changes may lead to penalties or an unexpected tax bill. Always double-check your calculations or consult with a professional.

FINAL THOUGHTS FOR NEW HAVEN TAXPAYERS

The increase in the standard deduction for 2026 is a positive development for most taxpayers, providing a larger "shield" against taxable income. While a $350 to $700 increase may seem small, it is a guaranteed reduction in your tax liability.

Whether you are looking to simplify your filing or need a complex strategy for your small business, Jose’s Tax Service is here to provide professional guidance with a casual, friendly touch. We are committed to New Haven and dedicated to getting you every dollar you deserve.

For more updates and news regarding the 2026 tax season, keep an eye on our news sitemap and stay tuned for the next post in our series regarding 1099-K requirements for side hustlers.

Contact Jose’s Tax Service today to schedule your 2026 tax planning session!