A Guide to Tax Breaks on Your 2026 Return

Being aware of the tax breaks available can help ease the burden on your 2026 return. As tax laws evolve, staying informed about the latest deductions and credits is crucial for maximizing your refund or minimizing your liability. Whether you’re a seasoned taxpayer or filing for the first time, knowing which of the myriad tax breaks apply to your situation, from education credits to energy-efficient home improvements, can make a substantial difference.

A financial advisor can help you optimize a tax strategy for your investment needs and goals.

Popular Deductions

The most popular tax deduction is the standard deduction. This deduction is available for filers who don’t itemize deductions. For most filers, taking the standard deduction reduces taxable income more than itemizing would.

Each year, the IRS adjusts the size of the standard deduction for inflation, with the exact amount determined by filing status. For 2026, the standard deduction for single filers and married people filing separately is $16,100 ($15,750 in 2025). Married taxpayers filing jointly can deduct $32,200 ($31,500 in 2025). Heads of household get a $24,150 standard deduction ($23,625 in 2025).

Deductions for Filers Who Itemize

For most taxpayers, taking the standard deduction saves more than itemizing. However, some taxpayers still choose to itemize. For those filers, mortgage interest, medical expenses and state and local taxes provide some of the best breaks.

If you took out a home loan after Dec. 15, 2017, you can deduct mortgage interest paid during 2026 on up to $750,000 of the loan ($375,000 for a married person filing separately). If your mortgage is from before Dec. 15, 2017, the limit is $1 million, or $500,000 for those married filing separately. These limitations were set to expire in 2025 when provisions of the Tax Cuts and Jobs Act expired, but it was made permanent by the One Big Beautiful Bill Act (OBBBA).

You may also be able to deduct outlays for medical care, including money spent on doctor visits, prescriptions, x-rays, eyeglasses and other health needs. You can only deduct amounts over 7.5% of your adjusted gross income, however.

State and local tax deductions, which can be a boon for residents of high-tax states, are also possible. As of 2025, filers can deduct up to $40,000 ($20,000 per person for married couples who file separately) for payments made for property and either income or sales taxes, with that amount poised to increase by 1% each year through 2029 under the OBBBA.

Other Tax Breaks for Your 2026 Return

Each year, the IRS adjusts tax brackets to account for inflation. The marginal rates charged for the seven brackets, ranging from 10% to 37%, are unchanged. But the income levels required to move into a higher bracket increase. This amounts to a break for people whose income would otherwise move them into a higher tax bracket.

2025 Federal Tax Brackets

Rate	Single	Married Filing Jointly	Married Filing Separately	Head of Household
10%	$0 – $12,400	$0 – $24,800	$0 – $12,400	$0 – $17,700
12%	$12,401 – $50,400	$24,801 – $100,800	$12,401 – $50,400	$17,701 – $67,450
22%	$50,401 – $105,700	$100,801 – $211,400	$50,401 – $105,700	$67,451 – $105,700
24%	$105,701 – $201,775	$211,401 – $403,550	$105,701 – $201,775	$105,701 – $201,775
32%	$201,776 – $256,225	$403,551– $512,450	$201,776 – $256,225	$201,776 – $256,200
35%	$256,226 – $640,600	$512,451 – $768,700	$256,226 – $384,350	$256,201 – $640,600
37%	$640,601+	$768,701+	$384,351+	$640,601+

Taxpayers with children or other dependents under age 17 can likely get the child tax credit. This credit was temporarily expanded up to $3,600 in 2021, but it is now $2,200 per child under the OBBBA.

Other tax breaks include the earned income tax credit, which can be worth up to $8,231 (up from $8,046 2025) depending on filing status, number of children and earned income.

Other tax breaks increased during the year to account for inflation include higher income levels for phasing out IRA contributions and higher thresholds for capital gains taxes. The size of an estate that is exempt from federal estate and gift taxes rose to $15 million in 2026, up from $13.99 million in 2025.

When Tax Breaks Apply and Who Can Claim Them

Not every tax break depends only on what you spend. Many depend on when you pay an expense and whether you meet specific eligibility rules. For 2026 returns, timing matters because deductions and credits generally apply to the tax year in which payments are made, not when bills are issued or services are performed. This distinction often affects mortgage interest, property taxes, charitable gifts and medical expenses.

Eligibility rules are just as important as timing. Many tax breaks phase out as income rises, which means earning more can reduce or eliminate a benefit entirely. Filing status also plays a role. Single filers, joint filers and heads of household often face different thresholds, limits and credit amounts. In addition, some credits depend on whether you can claim a dependent and whether that dependent meets age, residency and support tests.

Some tax breaks require itemizing deductions, while others are available even if you take the standard deduction. Mortgage interest and property taxes only matter if itemizing makes sense for you. Credits like the child tax credit or earned income tax credit apply regardless of whether you itemize, but they follow strict income and eligibility rules that must be met precisely.

Certain expenses are commonly misunderstood. For instance, medical costs are deductible only after they exceed a percentage of adjusted gross income. Education credits depend on enrollment status and who actually paid the tuition, while energy-related credits require that improvements meet federal standards and were placed in service during the tax year. Paying attention to these details can determine whether or not a tax break applies.

Bottom Line

A sticky note on a calculator that reads "tax break."

As tax season approaches each year, it’s important to keep various tax breaks in mind to ensure you limit your tax liability as best as possible. In 2026, popular tax breaks like the standard deduction and earned income tax credit increased while other tax breaks remained static. The marginal tax rates remain the same, although the tax brackets were adjusted for inflation, as they are every year.

Tax Planning Tips for Beginners

To make sure you don’t pay more taxes than necessary, consider hiring a financial advisor who specializes in taxes. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Taxpayers who don’t itemize may still be able to take some deductions using the Schedule 1 form. These include self-employment taxes, contributions to IRAs and health savings accounts, interest on student loans, expenses incurred by teachers and alimony.