Tax season can feel overwhelming, especially when the rules change. One of the biggest changes for many people is the standard deduction. For 2026, the IRS has updated the amounts, and knowing what these new numbers mean can save you money and headaches. Here’s a straightforward guide to understanding the 2026 standard deduction and how it affects your taxes.
The standard deduction is a fixed dollar amount that reduces the income you are taxed on. Instead of listing out individual deductible expenses, you can take this set amount to lower your taxable income.
For example, if you earn $50,000 in 2026 and take the standard deduction, only the income above that deduction amount is subject to federal income tax. This simplifies tax filing and often results in a lower tax bill for most people.
Because of its simplicity and size, the majority of taxpayers choose the standard deduction instead of itemizing.
The IRS adjusts the standard deduction yearly to keep up with inflation. For 2026, here are the numbers you need to know
These amounts reduce your taxable income before tax brackets are applied, which can significantly lower how much tax you owe. Over time, higher standard deductions mean you keep more of your hard-earned money. This is particularly important as the cost of living continues to rise, impacting everything from housing to groceries. By allowing taxpayers to deduct more from their taxable income, the IRS aims to alleviate some of the financial pressures that families face each year.
If you’re 65 or older, or legally blind, you get an extra deduction. For 2026, that amount is $1,900 per condition if you’re single or head of household, and $1,500 per condition if you’re married filing jointly. This additional deduction is designed to provide some relief for older taxpayers who may be on a fixed income or facing higher medical expenses as they age.
So, if you’re 67 and blind, filing jointly, you could add $3,000 to your standard deduction. That’s a nice boost to lower your taxable income. It’s worth noting that these additional deductions can be particularly beneficial for retirees, who often have to navigate a complex landscape of income sources and expenses. By maximizing your deductions, you can potentially reduce your tax burden significantly, allowing you to allocate more funds towards healthcare, leisure activities, or even savings for future needs.
The IRS adjusts the standard deduction each year to keep pace with inflation. For 2026, the standard deduction increased across all filing statuses compared to 2025, giving taxpayers a slightly larger reduction in taxable income.
Here’s how the standard deduction changed:
While these increases may seem modest, they can still lower your tax bill by reducing the amount of income subject to federal tax. For many taxpayers, this adjustment helps offset rising costs and prevents inflation from pushing more income into higher tax brackets.
If your income stayed about the same from 2025 to 2026, the higher standard deduction alone could result in a slightly lower taxable income, even before considering other deductions or credits.
Most taxpayers find the standard deduction easier and more beneficial. But when should you consider itemizing instead?
If your deductible expenses, like mortgage interest, medical costs, state and local taxes, and charitable donations, add up to more than the standard deduction, itemizing might save you more money.
For example, if you paid $17,000 in mortgage interest and property taxes, itemizing would be better than taking the $16,100 standard deduction.
Itemizing requires keeping detailed records and receipts. It can be time-consuming and complicated. The standard deduction is simple: no need to track every expense or worry about missing a deduction.
For busy people, this simplicity is a big plus. Plus, the IRS raised the standard deduction significantly in recent years, making it more attractive. For the tax year 2023, for instance, the standard deduction for single filers is $13,850, while married couples filing jointly can claim $27,700. This increase has allowed many taxpayers to benefit from a larger deduction without the hassle of itemizing.
Additionally, the standard deduction can be particularly advantageous for those who do not have substantial deductible expenses or who may not have the time or resources to meticulously document their financial activities. This is especially true for young professionals or families just starting out, who might be focused on building their careers and managing their daily responsibilities rather than delving into the intricacies of tax deductions. Moreover, the standard deduction can provide a sense of financial security, as it allows taxpayers to easily estimate their tax liability without the fear of missing out on potential deductions that require extensive documentation.
If you are self-employed, a freelancer, or earn income as a 1099 contractor, the standard deduction still applies to you, but it fits into your tax picture a little differently than it does for W-2 employees.
As a self-employed worker, you are taxed on your net income, not your gross income. This means you first subtract allowable business expenses from your total income. Common expenses include mileage, supplies, software, phone costs, and home office expenses.
Once business expenses are deducted, the standard deduction is applied to the remaining income. This lowers the amount of income that flows into the federal tax brackets.
Because of this two-step process, accurate expense tracking can significantly reduce how much of your income is taxed.
Self-employed workers generally owe self-employment tax in addition to federal income tax. Self-employment tax covers Social Security and Medicare and is calculated separately from income tax.
After accounting for business deductions and the deductible portion of self-employment tax, the standard deduction helps reduce your taxable income for federal income tax purposes. While the standard deduction does not reduce self-employment tax directly, it can meaningfully lower your overall tax bill.
Many self-employed workers do not have enough personal deductions to exceed the standard deduction, especially after recent increases. In those cases, taking the standard deduction simplifies filing and still provides a substantial reduction in taxable income.
For contractors with fluctuating income, the standard deduction can also act as a buffer, helping offset higher-earning months and reducing exposure to higher tax brackets.
Even if you plan to take the standard deduction, tracking business expenses is essential. Business deductions reduce income before the standard deduction is applied, which can have a larger impact on your tax bill than itemizing personal deductions.
Keeping detailed records throughout the year makes it easier to:
Using a mileage and expense tracker helps self-employed workers see their real taxable income as the year progresses. With clear records, you can plan ahead, adjust estimated payments, and make smarter decisions that keep more of your earnings working for you.
This combination of business deductions and the standard deduction is one of the most effective tools self-employed workers have for managing taxes in 2026.
Everlance helps over 4 million individuals track miles & expenses automatically, ensuring no deduction is left behind
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Brad Thibeau is the Head of Growth & Partnerships at Everlance. Brad has worked at Everlance since 2021 with a focus on helping self employed people save time and money on their taxes.
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