U.S. taxpayers face a very different filing season in 2026, and financial planners say the smartest move is to start adjusting before this year ends.
Advisers Urge Early Moves Before Rules Reset
“Taking action before the end of this year can be a huge benefit to your financial health in 2026,” said Dan Snyder, director of personal financial planning at the American Institute of CPAs, pointing to “many changes in the tax and financial planning space this year.”
Tax Filing Stays Complicated With No ‘Direct File’
The IRS will scrap its free Direct File system next year, after just two seasons. Treasury Secretary Scott Bessent said the program “wasn’t used very much” and argued that “the private sector can do a better job,” even though nearly 300,000 taxpayers used Direct File for 2025 returns, more than double the prior year. Taxpayer advocates counter that satisfaction scores topped 90% and warn that ending the option may push low-income filers back toward paid software.
Standard Deduction And Senior Bonus Both Expand
At the same time, the One Big Beautiful Bill Act reshapes the 2025 and 2026 returns. The standard deduction climbs to $31,500 for married couples in 2025 and $32,200 in 2026, with smaller increases for single filers.
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Adults 65 and older can claim a new $6,000 “senior bonus” deduction per person through 2028, a break that AARP, which is a nonprofit, nonpartisan organization dedicated to empowering individuals 50 and older to choose how they live as they age, describes as meaningful but complex because of income phaseouts.
Charitable Giving Rules Incentivize Strategic Donation Timing
Charitable rules also change. As per Schwab Brokerage, starting in 2026, non-itemizers can deduct up to $1,000 in cash gifts to eligible charities ($2,000 for couples), while itemizers face a new 0.5% of adjusted gross income floor before donations become deductible. The Tax Foundation estimates nearly 86% of filers will still take the standard deduction, so CPAs suggest “bunching” several years of gifts into one year to clear the new threshold.
Retirement Limits And Auto Deductions Offer Extra Levers
Other planning levers are moving too. As per an Associated Press report from last Friday, IRS inflation adjustments raise 401(k) contribution limits to $24,500 in 2026, with higher catch-ups for workers over 50, and new rules will eventually push high earners’ catch-ups into Roth accounts.
The auto-loan interest deduction created by the new law lets qualifying buyers of U.S.-assembled cars deduct up to $10,000 in interest, subject to income caps.
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Image via Shutterstock/ Chay_Tee
