2026 Tax Law Changes and Updates
The 2025 tax year (filing season of 2026) has come to a close, unless you are on extension. Now is the time, to begin preparing for 2026 tax year (filing season of 2027), and begin familiarizing yourself with the tax law changes and updates. Below are some key updates and information regarding the 2026 tax law changes and updates.
Charitable Contributions Update (New for Non-Itemizers):
Starting in 2026, taxpayers who take the standard deduction can claim an above-the-line deduction for qualified cash charitable contributions:
Up to $1,000 for single filers
Up to $2,000 for married filing jointly
This applies to direct gifts to eligible public charities (Examples are churches, educational organizations, hospitals, research institutions, support organization for colleges and universities, colleges and universities themself, and governmental units)*. It does not apply to donor-advised funds (DAFs) or most private foundations. Keep records like bank statements or receipts.
Itemizers face a new 0.5% AGI floor on charitable deductions, but non-itemizers get this modest incentive without needing to itemize.
The new law, allowing non itemizers to be able to deduct the charitable contribution/donations will lower the tax bill for many individuals already making donations and contributions. Taxpayers in prior years tend to believe they will be able to deduct their donations made throughout the year, but come to realize unless they are itemizing, the donation will not be a tax deduction (pre 2026). In the past, it only made sense to itemize, if you “Itemized Deductions” such as mortgage interest, real estate taxes, sale taxes, charitable contributions/donations, medical bills, and other miscellaneous items paid throughout the year are larger than the standard deduction you would receive ($15,750 for Single taxpayers and $31,500 for Married Filed Jointly taxpayers).
The new tax law update changes that. Individuals that do not itemize, but claim the standard deduction will now be able to deduct $1,000 if filing Single and $2,000 if Married filed jointly in relation to the charitable contributions/donation.
Make sure to keep receipts of the donations or email the entity you donated to after you donation for a tax form or a form proving the donation took place to take advantage of the new deduction.
Mortgage Insurance Premiums (PMI/MIP) Deduction Restored:
Starting in 2026, private mortgage insurance (PMI) and government mortgage insurance premiums (e.g., FHA MIP) are once again deductible. They are treated as qualified residence interest on Schedule A (taxpayers must itemize). Note: This will not apply if you take the standard deduction. This will be reported on form 1098 with your mortgage interest and sometime real estate taxes paid.
New and first-time homeowners who put down less than 20% on their purchase, triggering monthly PMI or MIP payments, can now deduct these premiums as an itemized deduction on Schedule A, effectively lowering their net cost of homeownership.
This deduction is subject to the permanent $750,000 mortgage debt cap ($375,000 if married filing separately) for acquisition indebtedness on a primary or second home and phases out for higher-income taxpayers (generally beginning above $100,000 AGI for most filers).
By reducing the after-tax expense of mortgage insurance, the change makes buying a home more affordable for for individuals who did not put 20% down on their home, while providing tax savings that scale with the taxpayer’s marginal rate.
Homeowners should track their 2026 PMI/MIP payments (reported on Form 1098) and compare total itemized deductions against the higher 2026 standard deduction (Your CPA should be doing this as well when you send them all your tax documents).
Icrease tax bracket ranges and an increase in the standard deduction amounts:
Permanent lower individual income tax rates and brackets (with inflation adjustments). The seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) is now permanent:
10%: $0–$12,400 (single) / $0–$24,800 (joint)
12%: $12,401–$50,400 (single) / $24,801–$100,800 (joint)
22%: $50,401–$105,700 (single) / $100,801–$211,400 (joint)
And so on, up to 37% over $640,600 (single) / $768,700 (joint). The 10% and 12% brackets receive an extra inflation adjustment boost in 2026, keeping more income taxed at lower rates.
Higher permanent standard deduction (inflation-adjusted): $16,100 (single/MFS), $32,200 (joint), $24,150 (head of household). This is significantly higher than pre-OBBBA baselines and benefits the vast majority of taxpayers who do not itemize will receive some benefit.
Overall, these three major changes will be beneficial for business owners and individuals. Remember, the major tax changes, that occurred in 2025 such as no tax on tips, increased senior standard deduction, no tax on qualified overtime, and more are still applicable in 2026.
