Tax Update Alert: The 2026 Changes Affecting Your Refund Right Now

New Haven, CT – February 18, 2026 – The 2026 tax season brings the most significant tax code changes in recent years, and these updates will directly impact your refund amount. Understanding these provisions now can help you maximize your tax refund and avoid leaving money on the table.

Standard Deduction Increases: Bigger Cuts for Everyone!

The standard deduction has increased substantially for 2026. Single filers can now claim $16,100, while married couples filing jointly can claim $32,200. This represents a tax savings of between $75 and $278 for single taxpayers, depending on your tax bracket.

For married couples, the savings range from $150 to $555. If you're 65 or older, you qualify for an additional deduction: $2,050 for single filers or $1,650 per qualifying spouse for those married filing jointly.

What this means for your tax planning: Most taxpayers in New Haven will benefit from taking the standard deduction rather than itemizing. Calculate both options to determine which provides the larger tax benefit. For seniors, this additional deduction can result in substantial savings that directly increase your refund.

The New Senior Deduction: Up to $6,000 for Eligible Taxpayers!

Taxpayers aged 65 and older can now claim a new deduction worth up to $6,000, resulting in an average tax cut of approximately $1,000. This deduction provides significant relief for retirees and older workers.

Eligibility requirements:

• Must be 65 years or older by December 31, 2026
• Modified adjusted gross income (MAGI) must not exceed phase-out thresholds
• Phase-out begins at $75,000 for single filers or $150,000 for joint filers
• Deduction becomes unavailable at $175,000 (single) or $250,000 (joint)

File your return carefully and ensure you claim this deduction if you qualify. Many seniors may overlook this provision, resulting in a smaller refund than they're entitled to receive.

Overtime and Tips Deductions: New Relief for Working Families!

Two groundbreaking deductions now provide tax relief for workers who earn overtime pay or receive tips as part of their compensation.

Overtime deduction: Eligible taxpayers can claim this deduction with an average tax cut of around $1,400. This provision benefits workers in manufacturing, healthcare, hospitality, and other industries where overtime is common.

Tips deduction: Approximately 5 million taxpayers qualify for this deduction, with an average benefit of $1,400 per return. Restaurant workers, hairstylists, delivery drivers, and other service industry professionals should ensure they claim this deduction.

Use accurate records of your overtime hours and tip income throughout the year. Maintain documentation including pay stubs, timesheets, and tip logs. The IRS may request verification of these amounts during processing or audit.

Auto Loan Interest Deduction: Up to $10,000 for New Vehicles!

Taxpayers who purchased new U.S.-assembled vehicles can now deduct up to $10,000 in auto loan interest. This deduction applies to loans for qualifying vehicles purchased in 2025 or 2026.

Requirements for claiming this deduction:

• Vehicle must be new (not used)
• Vehicle must be assembled in the United States
• Deduction limited to interest paid on loans, not lease payments
• Maximum deduction of $10,000 per taxpayer

Double-check your vehicle's country of assembly before claiming this deduction. Your loan documentation and vehicle registration should contain this information. Incorrectly claiming this deduction can delay processing of your return.

Enhanced Child Tax Credit: Additional $200 Per Child!

The Child Tax Credit has been enhanced for 2026, providing an additional $200 per qualifying child. This increase puts more money directly into the pockets of working families.

Key details:

• Credit applies to children under age 17
• Enhanced amount phases out at higher income levels
• Both refundable and non-refundable portions have increased
• May result in larger refunds for families with multiple children

Enter your children's information accurately on your return. Ensure Social Security numbers are correct and that dependents meet age requirements. Errors in dependent information represent one of the most common causes of refund delays.

SALT Cap Increase: Relief for Itemizers!

The state and local tax (SALT) deduction cap has increased to $40,000 for taxpayers who itemize deductions. This change provides substantial relief for homeowners in higher-tax states, including Connecticut.

For New Haven homeowners paying significant property taxes and state income taxes, this increase may make itemizing more beneficial than taking the standard deduction. Calculate both scenarios to maximize your tax refund.

Qualified Business Income Deduction: Now Permanent!

The 20 percent Qualified Business Income (QBI) deduction is now permanent, with increased phase-in thresholds. Small business owners, sole proprietors, and independent contractors can continue claiming this valuable deduction without uncertainty about future expiration.

Enhanced provisions include:

• Higher income thresholds before phase-out begins
• Expanded eligibility for certain service businesses
• Simplified calculation methods for qualifying taxpayers
• No sunset date: deduction is now permanent tax law

Review your business structure and income to ensure you're maximizing this deduction. Consult with a tax professional if your income falls near phase-out thresholds or if you operate multiple businesses.

Action Steps for New Haven Taxpayers!

Take these steps now to maximize your 2026 tax refund:

1. Gather documentation: Collect all W-2s, 1099 forms, receipts for deductible expenses, and records of overtime pay or tips
2. Calculate both scenarios: Determine whether itemizing or taking the standard deduction provides the larger benefit
3. Verify eligibility: Check qualification requirements for new deductions, especially the senior deduction and auto loan interest deduction
4. Review dependent information: Ensure all Social Security numbers and dates of birth are accurate
5. Consider professional preparation: These changes increase complexity: professional tax preparation can help you identify all available deductions and credits

The IRS has updated forms and schedules to accommodate these changes. Use the most current versions when filing your return. Outdated forms may result in processing delays or incorrect refund calculations.

Get Expert Help with Your 2026 Tax Return!

These substantial changes to the tax code create both opportunities and complexity. Working with an experienced tax professional ensures you claim every deduction and credit available to you while avoiding costly errors that can delay your refund.

At Jose's Tax Service, we stay current on all tax law changes and specialize in tax preparation for New Haven families and small businesses. Our concierge tax pro service provides personalized attention to your unique tax situation.

Schedule your appointment today and let us handle the complexity while you focus on maximizing your refund. Visit josestaxservice.com or call our New Haven office to get started on your 2026 tax return.

Don't leave money on the table this tax season. The 2026 changes represent significant opportunities for increased refunds( claim every dollar you're entitled to receive.)