Tax professionals have identified deductions that significantly impact typical filers for the 2026 tax year. Their guidance focuses on available options based on filing method.
Approximately 91% of U.S. taxpayers used the standard deduction in 2023, according to the Tax Policy Center. Craig Toberman, a CPA and certified financial planner at Toberman Becker Wealth in St. Louis, stated, "Since it nearly doubled in 2018 and now rises with inflation, the standard deduction quietly became a middle-class tax cut. This means millions no longer need to itemize to get meaningful tax relief."
The standard deduction automatically reduces taxable income by $15,750 to $31,500. A new provision for taxpayers aged 65 and older allows an additional deduction of up to $6,000, or $12,000 for married couples, which adds to the standard amount. This senior benefit phases out if modified adjusted gross income exceeds $75,000 for individuals or $150,000 for married couples.
Certain deductions, known as "above-the-line," can be claimed alongside the standard deduction. Contributions to traditional IRAs and 401(k)s reduce taxable income dollar for dollar, up to annual limits. "The retirement contribution deduction can be a very powerful planning lever because maxing a 401(k) can reduce taxable income in your high-earning years by over $20,000, while simultaneously funding future independence," said Toberman. IRA contributions for 2025 can be made until April 15, 2026, and applied retroactively if the account was open by December 31, 2025.
Health savings account contributions offer a triple tax advantage: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Starting in 2026, all Bronze and Catastrophic plans on the Health Care Marketplace will qualify for HSAs. Experts note HSAs can function like a second retirement account but may not suit those with chronic health issues due to high deductibles.
Student loan interest deductions allow up to $2,500 annually, regardless of filing method. "The student loan interest deduction helps at the margin, but it phases out quickly, so it often disappoints higher earners," Toberman remarked. For 2025, the deduction phases out starting at a modified AGI of $85,000 for single filers or $170,000 for married couples filing jointly, disappearing entirely at $100,000 and $200,000, respectively.
For those who itemize, key deductions include state and local taxes. The SALT deduction cap increases to $40,400 for 2025, up from $10,000. "The story of the year in 2026 is SALT," said Robert Persichitte, a CPA and certified financial planner at Delagify Financial in Arvada, Colo. The deduction covers state income taxes, property taxes, local taxes, and sales taxes on major purchases. Persichitte noted the previous $10,000 limit made SALT "either irrelevant or easy to ignore for most of the taxpayers I worked with." He added, "Items like property tax, vehicle registration tax, and sales tax on large purchases are going to start mattering again. So be sure to share them with your tax preparer."
Mortgage interest is deductible for loans used to buy, build, or improve a primary or secondary residence. "Higher interest rates are starting to bump up against the standard deduction," Persichitte observed. "Mortgage interest is important for taxes again." Limits apply based on loan origination date, and private mortgage insurance premiums are again deductible as qualified residence interest for 2026, phasing out above a $100,000 modified AGI.
Charitable donations are deductible for itemizers, with cash donations generally limited to a percentage of income. Starting in 2026, the first 0.5% of AGI donated does not count for a deduction. Jason Gakeler, CPA and certified financial planner at Accounting Resource Group in Minneapolis, explained, "So if you make $100,000, the first $500 you give does nothing for your taxes — only what's above that helps." He cautioned, "I always tell my clients that the main goal here should be charitable intent, not necessarily tax savings." A new rule allows standard deduction filers to deduct up to $1,000 per person for cash donations to nonprofits, part of the One Big Beautiful Bill Act passed in July 2025.
Medical expenses are deductible only if they exceed 7.5% of adjusted gross income. "Medical expenses are typically the hardest itemized deduction to benefit from," said Gakeler. This deduction can aid families with substantial long-term care costs but is often inaccessible to younger individuals.