New 2026 Standard Deduction: Your Tax-Saving Move
The **One, Big, Beautiful Bill Act (OBBBA)**, recently signed into law, has permanently maintained and expanded the historically high standard deduction amounts set by the $\text{2017}$ Tax Cuts and Jobs Act. For tax year $\text{2026}$ (the taxes you file in early $\text{2027}$), these numbers are increasing again due to inflation, offering a substantial way to reduce your taxable income.
Understanding these new thresholds is crucial because they determine whether you should take the standard deduction (which nearly $\mathbf{90\%}$ of taxpayers do) or spend time itemizing.
The 2026 Standard Deduction Amounts
The following amounts reflect the standard deduction for the $\text{2026}$ tax year, adjusted for inflation and the OBBBA:
| Filing Status | 2026 Standard Deduction |
|---|---|
| **Married Filing Jointly** & Surviving Spouses | $\mathbf{\$32,200}$ |
| **Single** & Married Filing Separately | $\mathbf{\$16,100}$ |
| **Head of Household** | $\mathbf{\$24,150}$ |
*These amounts are an increase of $\text{\$700}$ (Joint) and $\text{\$350}$ (Single) from the updated $\text{2025}$ amounts.*
New Tax-Saving Opportunity for Seniors
The OBBBA introduced a key change for older Americans: a new deduction available to taxpayers aged $\mathbf{65}$ and older, regardless of whether they itemize or take the standard deduction. This is separate from the additional standard deduction previously offered.
Senior Deduction (Aged 65+)
- **The Deduction:** An additional deduction of up to $\mathbf{\$6,000}$ per qualifying individual.
- **Maximum:** $\mathbf{\$6,000}$ for a single filer; up to $\mathbf{\$12,000}$ for a married couple filing jointly (if both spouses qualify).
- **Phase Out:** The deduction begins to phase out for taxpayers with Modified Adjusted Gross Income (MAGI) over $\mathbf{\$150,000}$ (single) or $\mathbf{\$300,000}$ (joint).
This provides substantial relief for many retirees, lowering their taxable income right off the top.
Your $\text{2025}$ Year-End Tax-Saving Move: Deduction Bunching
The large standard deduction means most taxpayers cannot reach the itemization threshold through regular expenses alone. However, you can use the high threshold strategically with a tactic called **Deduction Bunching**.
How Deduction Bunching Works
The goal is to concentrate two years' worth of deductible expenses (like charitable contributions or state and local taxes, if itemizing) into a single tax year, allowing your total itemized deductions to exceed the high standard deduction.
- **Example:** A married couple has $\text{\$18,000}$ in annual itemizable expenses. This is too low for the $\text{\$32,200}$ standard deduction.
- **The Move:** In $\text{2025}$, they make their regular $\text{\$10,000}$ charitable contribution PLUS their $\text{2026}$ contribution of $\text{\$10,000}$, totaling $\mathbf{\$20,000}$. Added to their other expenses ($\text{\$8,000}$), their itemized total becomes $\mathbf{\$28,000}$ for $\text{2025}$.
- **The Result:** Since $\text{\$28,000}$ is still below the $\text{2025}$ joint standard deduction of $\mathbf{\$31,500}$, they still take the standard deduction for $\text{2025}$. In $\text{2026}$, with their contributions already made, they take the new $\mathbf{\$32,200}$ standard deduction. **This strategy requires careful planning with an accountant to ensure the benefits outweigh the costs.**
Use our free $\text{2026}$ Tax Calculator to see whether the standard deduction or itemizing provides you with the greater tax reduction.
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