New Tax Deductions In 2026

 The One Big Beautiful Bill Act (OBBBA) enacted in 2025 includes a variety of tax provisions that begin in 2026:

Charitable deductions:

• Taxpayers who do not itemize on Schedule A can claim a charitable deduction up to $1,000 for single filers and $2,000 for married individuals filing jointly for qualifying cash contributions. In this case cash means check, EFT, online payment, credit card, debit card or payroll deduction. There are some limitations for taxpayers in the 37% tax bracket.

• Taxpayers who do itemize on Schedule A can deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI).

• As in the past, if you receive a benefit in exchange for the contribution (merchandise, goods or services, event tickets, etc), you can only deduct the amount that exceeds the fair market value of the benefit received.

• Taxpayers must retain a record of all cash, check, other monetary, and/or property contributions of $250 or more.

Educators may be eligible to itemize expenses above the $350 cap:

• Eligible educators can claim up to $350 deduction (reduces adjusted gross income (AGI) even if don’t itemize).

• Qualified expenses exceeding $350 can be deducted on Schedule A if taxpayers itemize.

• Educators now include interscholastic coaches and sports administrators.

• Expenses incurred outside the traditional classroom (e.g., extracurricular programs, alternative instructional environments, etc) can qualify if they are directly tied to educational activities.

• Taxpayers must retain all receipts.

The limits and flexibility of 529 accounts have expanded:

• Annual withdrawal limit for K-12 education expenses increases to $20,000 per beneficiary.

• In addition to private school tuition, funds can now be used for:

• tutoring services and educational therapies for students with disabilities (if the instructor is qualified and not related to the student)

• curriculum books, materials, and online learning tools

• fees for standardized tests (e.g., SAT/ACT, AP)

• dual-enrollment college courses taken in high school

In addition to K-1 education expenses, additional postsecondary expenses include:

• tuition, fees and materials for approved training and vocational programs

• testing fees for credential or license exams

• continuing education needed to maintain credentials/license

Health Savings Accounts (HSA) are now allowed for some Marketplace plans:

• Bronze and Catastrophic plans available through an exchange are now HSA-compatible.

• Eligible individuals enrolled in certain direct primary care (DPC) service arrangements may contribute to an HSA, and they may use their HSA funds tax-free to pay periodic DPC fees.

• High-deductible health plans (HDHP) can now permanently offer pre-deductible telehealth and remote care without disqualifying a taxpayer from making tax-free HSA contributions.

Gambling losses:

• A taxpayer can now only deduct gambling losses up to 90% of winnings (used to be 100%).

• Losses can only be claimed as an itemized deduction. You cannot benefit from this loss if you take the standard deduction.

• The IRS requires detailed logs of all wins and losses during the year.

• Forms W-2G and 1099 reporting for slot jackpots and traditional winnings increases to $2,000 (from $1,200).