IRS Changes You Should Know for the 2026 Tax Filing Season
(For Your 2025 Taxes)
The 2026 tax filing season is here, and while the main deadline hasn’t changed, several IRS updates for tax year 2025 could affect how much tax you owe—or how much you get back.
Some deductions are higher, certain credits increased, and there’s still widespread confusion around payment apps like Venmo, PayPal, and Cash App. None of these changes are dramatic on their own, but together they can make a meaningful difference in your final tax outcome.
Below is a clear, plain-English breakdown of the IRS changes most households should know—and what they mean for you.
Important: Tax rules can be clarified or updated during the season. Always rely on the most current IRS instructions when filing your return.
1. Higher Standard Deduction for 2025
For most taxpayers, the biggest change is a higher standard deduction—the amount of income that is automatically excluded before taxes are calculated.
For your 2025 taxes (filed in 2026), the standard deduction is:
Single or Married Filing Separately: $15,750
Married Filing Jointly or Qualifying Surviving Spouse: $31,500
Head of Household: $23,625
Why this matters
A higher standard deduction means more of your income is tax-free by default. Because of this increase, many people who itemized deductions in prior years may now benefit more from taking the standard deduction instead.
What you should do
If you’ve itemized before, don’t assume it’s still the better choice. It’s often worth comparing both options to see which results in a lower taxable income.
Example:
A single taxpayer earning $60,000 in wages would generally exclude $15,750 from taxation before tax brackets are applied.
2. New Additional Deduction for Seniors (Age 65+)
For tax year 2025, the IRS introduced a new additional deduction for taxpayers age 65 or older.
Eligible taxpayers can deduct an extra $6,000 per person
Married couples where both spouses qualify may deduct up to $12,000 total
This deduction applies whether you take the standard deduction or itemize
The benefit begins to phase out at higher income levels
Why this matters
This change can significantly reduce taxable income for retirees and older workers, especially those on fixed or moderate incomes.
What you should do
If you or your spouse turned 65 at any point during 2025—even late in the year—you may qualify. Be sure your date of birth is correctly reported, and understand that higher income levels may reduce the benefit.
Example:
A married couple where both spouses are over 65 and have a modified adjusted gross income around $160,000 may receive a reduced additional deduction, depending on how the phase-out applies to their situation.
3. Child Tax Credit (CTC) Updates
The Child Tax Credit increased slightly for 2025.
Maximum credit: up to $2,200 per qualifying child
Social Security numbers are required for both the child and the taxpayer claiming the credit
If filing jointly, at least one spouse must have a valid SSN
A portion of the credit may be refundable, even if you owe little or no tax
For 2025, the refundable portion (often called the Additional Child Tax Credit) may be up to $1,700 per qualifying child, depending on earned income and other factors.
Why this matters
Small errors—such as a typo in a child’s Social Security number—can delay refunds for weeks or months.
What you should do
Carefully verify all names and SSNs before filing. If your family situation changed during the year (new child, custody changes, dependents aging out), review eligibility closely.
4. Earned Income Tax Credit (EITC): 2025 Amounts
The Earned Income Tax Credit is designed to help low- and moderate-income workers, especially families with children.
For tax year 2025, the maximum EITC amounts are:
No children: up to $649
1 child: up to $4,328
2 children: up to $7,152
3 or more children: up to $8,046
There is also a strict investment-income rule:
If your investment income exceeds $11,950, you are not eligible for the EITC—even if your wages are low.
Why this matters
Relatively small amounts of interest, dividends, or other investment income can affect eligibility for thousands of dollars in credits.
What you should do
If you earn gig income, have side work, or receive bank interest or dividends, keep accurate records. Eligibility depends on total income, filing status, and family details.
Example:
A single parent with one qualifying child and $24,000 in wages may qualify for up to $4,328 in EITC, depending on their exact income and filing details. However, exceeding the investment-income limit would eliminate eligibility entirely.
5. Payment Apps and Form 1099-K (Venmo, PayPal, Cash App)
There is still a lot of confusion around Form 1099-K, so this point is especially important:
Under current federal guidance, payment platforms are generally required to issue Form 1099-K only if both conditions are met:
More than $20,000 in gross payments and
More than 200 transactions
Some platforms may still issue a 1099-K at lower amounts
Income is taxable whether or not you receive a form
You may still see headlines mentioning a $600 threshold. Those reflect earlier proposals or transitional guidance. For 2025 federal returns, the IRS guidance in effect reflects the $20,000 and 200-transaction thresholds.
Why this matters
Not receiving a 1099-K does not mean the income is tax-free.
What you should do
If you sell goods, provide services, or run a side business—even informally—track your income and expenses. Try to keep personal reimbursements separate from business payments whenever possible.
6. Key Dates for the 2026 Filing Season
IRS e-file opening day: Monday, January 26, 2026
Regular filing deadline: Wednesday, April 15, 2026
Filing early can help reduce refund delays and lower the risk of tax-related identity theft.
Common Mistakes That Delay Refunds
Many refund delays are caused by small, avoidable issues, including:
Incorrect Social Security numbers for dependents
Missing interest or dividend income
Mixing personal and business payments in the same app
Assuming itemizing deductions is always better than taking the standard deduction
What You Can Do Now
To make filing smoother and avoid surprises:
Gather income documents early (W-2s, 1099s, payment-app summaries)
Double-check names and Social Security numbers
Keep records for side income and related expenses
Ask questions if something looks different from last year—tax rules change
Final Thoughts
The 2026 filing season doesn’t bring sweeping tax law changes, but small updates can still have a meaningful impact on your refund or balance due.
Understanding what changed—and how it applies to your situation—can help you file with confidence and avoid unnecessary delays.