The 2026 Tax Filing Surprise: Why Your Return Feels Different This Year (And What Schedule 1-A Means for You)

NEW HAVEN, CT – February 8, 2026 – If your 2026 tax return feels different from previous years, you're not imagining things. The Internal Revenue Service (IRS) has implemented significant changes following the passage of the One Big Beautiful Bill in July 2025, introducing new forms and deductions that affect millions of American taxpayers.

What Changed This Year?

The 2026 filing season marks one of the most substantial shifts in tax preparation procedures in recent years. Congress enacted sweeping tax code modifications that created new deductions, eliminated certain exemptions, and introduced additional forms that many taxpayers will encounter for the first time.

The IRS opened the filing season on January 26, 2026, and projects processing approximately 164 million individual income tax returns this year. The filing deadline remains April 15, 2026.

Schedule 1-A: The New Form You Need to Know About!

Schedule 1-A is a new supplementary form where taxpayers claim specific tax deductions and exclusions created by recent legislation. Rather than claiming these benefits directly on Form 1040, the IRS now requires you to organize them on this dedicated schedule.

Think of Schedule 1-A as the new "bonus deductions" form. The IRS created this separate schedule to streamline the processing of new tax breaks and ensure accurate reporting of these specific benefits.

What Deductions Go on Schedule 1-A?

Taxpayers should use Schedule 1-A to claim the following deductions:

No Tax on Tips – Eligible workers in service industries can exclude tips from their taxable income, subject to income phaseouts. This deduction applies to qualifying tip income received during the 2025 tax year.

No Tax on Overtime – Workers can exclude up to $12,500 for single filers ($25,000 for joint filers) in overtime wages from taxable income. This exclusion is subject to income limits and qualifying work definitions. Enter the total overtime wages excluded on the designated line of Schedule 1-A.

No Tax on Car Loan Interest – Taxpayers may deduct interest payments on certain vehicle loans. This deduction applies to qualifying automobile financing agreements and should be calculated using the specific worksheet provided in the Schedule 1-A instructions.

Enhanced Deduction for Seniors – A bonus deduction automatically calculates based on age for taxpayers 65 and older. This additional deduction supplements the standard deduction and does not require itemization.

How Schedule 1 Changed Too!

Schedule 1 has been revamped to work alongside Schedule 1-A and capture all adjustments to income created by the new tax law. Many filers who previously used only Form 1040 now need to complete both Schedule 1 and Schedule 1-A to take full advantage of available tax breaks.

Double-check which schedules apply to your specific situation. Missing either form can lead to delayed processing or an incorrect refund amount.

Other Major Changes for the 2026 Filing Season!

Increased Standard Deductions

For the 2025 tax year (filed in 2026), standard deduction amounts expanded significantly:

• Single filers: $15,750
• Head of household: $23,625
• Married filing jointly: $31,500

These increases mean fewer taxpayers will benefit from itemizing deductions. Review your total itemized deductions against these amounts to determine the most advantageous filing method.

Enhanced Child Tax Credit

The Child Tax Credit increased from previous levels, providing additional relief for families with qualifying children. Verify your eligibility and claim the full credit amount by accurately completing the relevant sections of your return.

SALT Deduction Increase

The state and local taxes (SALT) deduction cap raised to $40,000 for 2025. This change particularly benefits taxpayers in high-tax states who previously reached the lower limitation.

New Trump Accounts

Parents can now establish tax-advantaged Individual Retirement Accounts (IRAs) for children, creating long-term savings opportunities with favorable tax treatment. Consult with a tax professional to determine if this savings vehicle aligns with your family's financial goals.

Mortgage Interest Deduction Limit

The mortgage interest deduction limit increased to $750,000, allowing taxpayers with higher mortgage balances to deduct additional interest expenses.

Elimination of Personal and Dependent Exemptions

The new law eliminated personal and dependent exemptions. However, enhanced credits and deductions offset this change for most taxpayers. Calculate your total tax liability under the new structure to understand your individual impact.

Important Refund Processing Changes!

The IRS is phasing out paper tax refund checks and now strongly encourages taxpayers to establish a bank account to receive tax refunds via direct deposit. This change speeds up refund processing and reduces the risk of lost or stolen checks.

Action required: Enter your bank routing number and account number accurately on your tax return. A single digit error may delay your refund by several weeks.

What This Means for Your Filing Process

Step 1: Gather Additional Documentation

Collect records for any overtime wages, tip income, or car loan interest payments made during 2025. These documents are essential for accurately completing Schedule 1-A.

Step 2: Review Your Forms

Determine which schedules apply to your situation. Most taxpayers claiming new deductions will need Form 1040, Schedule 1, and Schedule 1-A at minimum.

Step 3: Calculate Carefully

Use the specific worksheets and instructions provided for each new deduction. Incorrect calculations may lead to processing delays or IRS correspondence.

Step 4: Double-Check Bank Information

Verify your direct deposit information before submitting your return. This simple step can prevent significant refund delays.

Step 5: File Electronically

The IRS processes electronic returns faster than paper returns. Electronic filing also reduces error rates and provides immediate confirmation of receipt.

How Jose's Tax Service Can Help You Navigate These Changes

At Jose's Tax Service, we understand that new forms and changing rules can feel overwhelming. Our team stays current on all tax law modifications and specializes in helping clients maximize their refunds under the new system.

We provide personalized guidance on Schedule 1-A completion, ensure you claim all eligible deductions, and verify your return accuracy before filing. Our concierge approach means you receive individual attention and expert advice tailored to your specific tax situation.

Whether you prefer in-person service at our New Haven location or virtual tax preparation from anywhere, we make the 2026 filing season straightforward and stress-free.

Key Deadlines and Reminders

April 15, 2026 – Tax filing deadline for most individual taxpayers

October 15, 2026 – Extended filing deadline (requires filing extension request by April 15)

File early to avoid last-minute complications and receive your refund faster. The IRS begins processing returns immediately upon submission, and early filers typically receive refunds within 21 days of electronic filing with direct deposit.

Take Action Now!

Review your tax documents and determine which new deductions apply to your situation. Schedule an appointment with Jose's Tax Service to ensure you take full advantage of the new tax benefits available under the 2026 rules.

The changes may seem complex, but with proper guidance and careful attention to the new requirements, you can navigate this filing season successfully and potentially increase your refund compared to previous years.

Contact Jose's Tax Service today at josestaxservice.com to schedule your personalized tax preparation consultation. We're here to make sense of Schedule 1-A and all the other 2026 changes( so you don't have to.)