New Tax Law May Provide Relief for Taxpayers in 2026

Washington, D.C. — The new budget reconciliation bill passed in July 2025 is set to significantly impact taxpayers as the first tax season under the legislation approaches. Experts, including accounting professor Thomas Goldman, shared insights on how the changes will affect tax filing and financial planning.

The recent changes include a substantial increase in the cap on state and local tax (SALT) deductions, raising the limit from $10,000 to $40,000. This adjustment could benefit many taxpayers who previously faced restrictions on their deductions.

In addition to SALT changes, the new law exempts certain types of income, such as tips, overtime, and senior bonus payments, from taxation. Goldman noted that these exemptions could lead to higher take-home pay for many individuals.

Another important change is the increase in the standard deduction, which now stands at $15,750 for individual filers and $31,500 for married couples. “That’s an extra few hundred dollars that you’re getting back,” Goldman explained. “That one’s huge because now we’re talking about a huge deduction that every single person is getting regardless of all your other activities.”

As taxpayers prepare for this first tax season under the new law, experts recommend familiarizing themselves with the updated regulations to maximize their potential refunds. Taxpayers are encouraged to file electronically to expedite processing and refunds. The IRS provides numerous resources, including access to online accounts for monitoring tax records.

For those with concerns about the accuracy of their tax returns, it is crucial to wait for all year-end income documents before filing. This approach can prevent complications and delays in issuance of refunds due to discrepancies in reported income.

With the changes poised to benefit a large number of taxpayers, individuals should stay informed and be proactive as they approach filing deadlines in early 2026.