Planning for 2027 tax season: wrapping up 2026 tax year

As we approach the end of 2026, I wanted to share several important Federal and New Jersey tax updates that may affect your tax planning for the remainder of the year and beyond. Some of these changes may provide valuable tax-saving opportunities, depending on your individual circumstances.

Please note that the following is a general overview. Eligibility requirements, income limitations, and other restrictions may apply. For additional information, please visit the IRS website at www.IRS.gov.

Federal Tax Updates for 2026

• Several new or enhanced federal tax deductions may be available for eligible taxpayers, including:

o   Eligible workers may deduct up to $25,000 in qualified tips, subject to income limitations and other requirements.

o   Eligible individuals may deduct up to $12,500 ($25,000 for married couples filing jointly) qualified overtime (such as the “half” portion of “time-and-a-half” compensation)

o   Eligible taxpayers may deduct up to $10,000 in qualifying interest on certain passenger vehicle loans, subject to vehicle, loan, and income requirements.

o   For tax years 2025-2028, eligible individuals who are age 65 and older may claim an additional deduction of $6,000 (or $12,000 total for a married couple where both spouses qualify). Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

These deductions are generally available whether you itemize or claim the standard deduction, subject to the applicable rules.

• Standard Deductions:

o   $16,100 for single filers and married couples filing separately

o   $24,150 for single heads of households

o   $32,200 for married couples filing jointly

o   Additional standard deduction amounts may be available for taxpayers who are age 65 or older and/or blind.

• The Federal State and Local Tax (SALT) itemized deduction has increased to $40,400 for most taxpayers ($20,200 if married filing separately). Depending on your circumstances, state and local taxes, charitable contributions, mortgage interest, and eligible medical expenses may make itemizing deductions more beneficial than claiming the standard deduction.

• Beginning with tax year 2026, if you do not itemize, you may deduct up to $1,000 ($2,000 if filing jointly) of your cash contributions to certain qualified organizations. Verify using the Tax-Exempt Organization Search Tool on https://apps.irs.gov/app/eos/

• Child Tax Credit: The Child Tax Credit remains available for eligible taxpayers. The amount you may claim depends on factors such as the number of qualifying children, income, filing status, and other eligibility requirements.

  
  

• Energy Credits: Please be aware that federal residential energy tax credits, including the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit, generally ended for qualifying property placed in service or expenditures made after December 31, 2025.

If you made eligible improvements during 2025, you may still qualify for a credit on your 2025 tax return, depending on the applicable requirements. If you are planning home improvements in 2026, please consult with me before assuming that a federal tax credit will be available. For additional information, visit the IRS website.

• The annual exclusion for gifts increases to $19,000 for calendar year 2026. 

• Federal income tax brackets have been adjusted for inflation for 2026. Reviewing your income, withholding, and estimated tax payments can help you plan ahead and reduce the possibility of an unexpected tax balance.

New Jersey Tax Updates

• New Jersey has introduced a new online tax portal to help taxpayers access tax services, file returns, and obtain tax records. You can visit the portal here: www.nj.gov/treasury/taxation/taxportal

  
  

• New Jersey's property tax relief programs include ANCHOR, Senior Freeze (Property Tax Reimbursement), and Stay NJ. For eligible seniors and certain disabled residents, the combined PAS-1 application is used to apply for the applicable programs. Other eligible ANCHOR applicants may have a separate filing process or may qualify for an automatically filed application.

  • The deadline to apply for the relevant 2025 benefit-year property tax relief programs is November 2, 2026. Please review your eligibility and filing requirements to ensure that you do not miss the deadline.

For more information, visit the New Jersey Property Tax Relief website: propertytaxrelief.nj.gov

A Few Year-End Tax Planning Reminders

If you have questions about any of these changes or would like to discuss how they may affect your individual tax situation, please feel free to contact me. I would be happy to help you identify potential tax-saving opportunities and plan ahead.

Please remember that the final 2026 federal estimated tax payment is generally due January 15, 2027. If you make estimated payments, please ensure that you meet the applicable deadlines to help minimize potential penalties and interest.

I also encourage you to review the tax preparation checklist on my website www.TriunfarTax.com, to help ensure that you have the necessary documents and information ready for the next filing season.

Thank you for trusting me with your tax preparation needs. I truly appreciate your business and look forward to continuing to work with you.

Warm regards,

Thalia I. Treby, MS