There are real changes this year. New deductions are available for tipped workers, people who earn overtime, and seniors — and you can claim them even if you don’t itemize. Your W-2 also looks different. Here’s what matters.
New Deductions You May Be Able to Claim
Four new deductions were created by recent federal tax law. They run from 2025 through 2028, and importantly, you do not have to itemize to claim them — they are available even if you take the standard deduction.
Tips
For workers in occupations that customarily receive tips. Begins phasing out above $150,000 of income ($300,000 if married filing jointly).
Overtime
$25,000 on a joint return. Only the premium portion required by federal law counts — the “half” of time-and-a-half, not the whole payment.
Car Loan Interest
Strict rules apply — see below. Begins phasing out above $100,000 of income ($200,000 if married filing jointly).
Seniors 65+
$12,000 if both spouses qualify. Begins phasing out above $75,000 of income ($150,000 if married filing jointly). This is on top of the existing extra deduction for being 65 or older.
Things that disqualify people more often than they expect
- Overtime: only the extra premium required under federal law qualifies, not your entire overtime check. If you own 20% or more of the business and actively manage it, you generally will not qualify.
- Tips: your occupation must be on the official list of customarily tipped occupations. Mandatory service charges are not treated as tips.
- Car loan interest: the loan must have started after December 31, 2024, the vehicle must be new, for personal use, and assembled in the United States. Leases do not qualify. You must provide the vehicle’s VIN, every year you claim it.
- All four: a valid Social Security number is required, and married taxpayers must file jointly.
Your 2026 W-2 Looks Different
The IRS added new boxes to the W-2 for 2026 so that employers can report the amounts behind these new deductions.
| Where | What it shows |
|---|---|
| Box 12, code TP | Total cash tips reported to your employer |
| Box 12, code TT | Total qualified overtime compensation |
| Box 14b | Your Treasury Tipped Occupation Code |
Standard Deduction for 2026
| Filing status | Amount |
|---|---|
| Married filing jointly | $32,200 |
| Head of household | $24,150 |
| Single | $16,100 |
| Married filing separately | $16,100 |
If you are 65 or older, or blind, you add $1,650 to these amounts — or $2,050 if you are unmarried.
2026 Tax Brackets
These rates apply to your taxable income — what is left after your deductions, not your total pay.
| Rate | Single — income over | Married filing jointly — income over |
|---|---|---|
| 10% | $0 | $0 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,750 | $403,550 |
| 35% | $256,200 | $512,450 |
| 37% | $640,600 | $768,700 |
Credits for 2026
Child Tax Credit
$2,200 per qualifying child, with up to $1,700 of it refundable.
Earned Income Tax Credit — maximum amounts
| Qualifying children | Maximum credit |
|---|---|
| Three or more | $8,231 |
| Two | $7,316 |
| One | $4,427 |
| None | $664 |
Whether you qualify, and for how much, depends on your income and family situation. We will work that out with you.
A Few Other 2026 Numbers
- Annual gift tax exclusion: $19,000 per recipient
- Estate tax basic exclusion: $15,000,000
- Qualified business income deduction threshold: $201,750 for most filers, $403,500 married filing jointly
Bring the Right Paperwork
These new deductions only work if you bring the documents that prove them — your full W-2, any tip or overtime statements, and the VIN if you are claiming car loan interest.
Our checklist walks through everything, and you can print it.
Please note: this page is general information, not tax advice. Tax rules are detailed and depend on your individual circumstances, and the IRS can issue further guidance during the year. Figures here are drawn from IRS Revenue Procedure 2025-32 and IRS guidance on the new deductions. Please speak with us about your own situation before making decisions based on anything here. Last reviewed November 2026.