These notes focus on tax year 2026 — returns you will file starting around January 2027. The information below reflects the law as of November 2026; changes may still occur before filing season begins. The main federal framework comes from the One Big Beautiful Bill Act (OBBBA / Working Families Tax Cuts, signed July 2025), plus the IRS's official 2026 inflation adjustments in Revenue Procedure 2025-32. Most major individual changes that began in 2025 continue, with some new provisions starting in 2026.

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Federal Tax Year 2026

Core Amounts (Official IRS Figures)

Standard deduction:

• $16,100 — Single or Married Filing Separately
• $32,200 — Married Filing Jointly / Surviving Spouse
• $24,150 — Head of Household

These are up from the 2025 OBBBA levels, reflecting inflation adjustments.

Tax rates: The permanent 10%–37% structure continues. The 37% bracket starts above $640,600 (single) or $768,700 (married filing jointly). Lower brackets received a slightly larger inflation bump this year.

Child Tax Credit: $2,200 per qualifying child (continues; indexed later).

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Temporary Deductions Continuing Through 2028

The following deductions generally apply whether you itemize or take the standard deduction. Each is subject to MAGI phase-outs, SSN requirements, and other eligibility rules.

Senior deduction (age 65+): An extra $6,000 per person ($12,000 if both spouses qualify), on top of the regular additional amount for age or blindness. Phases out above approximately $75,000 MAGI (single) or $150,000 (joint).

Qualified tips: Up to $25,000 for workers in tip-based occupations.

Qualified overtime (premium portion): Up to $12,500 (single) or $25,000 (joint).

Car loan interest: Up to $10,000 on qualifying new U.S.-assembled personal-use vehicles, for loans originated after December 31, 2024.

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New or Notable for 2026

Charitable contributions for non-itemizers: Starting in 2026, taxpayers who take the standard deduction can deduct up to $1,000 ($2,000 for joint filers) in cash charitable contributions.

Itemizer charitable floor: Itemizers now face a new 0.5% of AGI floor on charitable contributions.

SALT deduction cap: Raised to $40,400 (with a phase-down for higher incomes). This higher cap runs through 2029.

1099-NEC/MISC reporting threshold: Rises to $2,000 for payments made in 2026 (up from $600).

Estate and gift exclusion: The basic exclusion amount is $15 million lifetime for 2026 decedents and gifts.

Other ongoing items: 100% bonus depreciation for qualifying property, the permanent QBI deduction, and higher Section 179 limits continue.

Clean energy credits: Vehicle and home energy credits were largely ended or accelerated in phase-out for earlier dates and are generally unavailable or very limited for 2026.

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California Tax Year 2026

California continues to diverge significantly from federal rules.

Standard Deduction and Exemptions

• $5,900 — Single or Married Filing Separately
• $11,800 — Married Filing Jointly, Surviving Spouse, or Head of Household

(Indexed at 3.4% California CPI.) Personal and dependent exemption credits also rose modestly — for example, the personal exemption credit is $158 (single) or $316 (joint), and the dependent exemption credit is $491.

Rates and Brackets

California's 1%–12.3% structure continues, plus the separate 1% Mental Health Services Tax on taxable income over $1 million (for a 13.3% effective top rate). All brackets were indexed upward by 3.4%.

A significant development: Proposition 3, approved by California voters in November 2026, makes the higher top rates (10.3%, 11.3%, and 12.3%) permanent rather than sunsetting in 2031. Approximate single thresholds: 10.3% starts around $384,000; 11.3% around $461,000; 12.3% above approximately $768,000 (exact figures from FTB schedules).

California Non-Conformity — What Does Not Apply Here

California's IRC conformity date is January 1, 2025. It generally does not adopt the federal OBBBA deductions for:

• Tips
• Overtime
• The $6,000 senior deduction
• Car loan interest
• The non-itemizer charitable deduction
• The higher SALT rules

Those benefits reduce federal tax only. California starts from federal AGI and requires its own adjustments on Schedule CA. Tip and overtime income remain fully taxable at California rates.

Other California notes include continued business credit limitations, PTE elective tax extensions, and various administrative and form updates. New or expanded taxes from the prior legislative session — such as those affecting digital software and SaaS — may affect some businesses or transactions.

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Practical Takeaways for 2026 Filing Prep

Federal returns will reflect the higher standard deduction, continuing temporary deductions (tips, overtime, senior, car loan), the new non-itemizer charitable option, and inflation-adjusted brackets.

California returns will look different — lower standard deduction, no flow-through of most new federal deductions, and permanent high top rates for upper-income filers.

Documentation to gather now:

• Tip and overtime amounts (W-2 reporting changes are expected for 2026)
• Car loan interest statements and VINs if claiming that deduction
• Charitable contribution receipts

Review withholding or estimated payments for 2026 income now, especially if you have significant tips, overtime, or higher SALT exposure.

Official sources to watch:

• IRS.gov — inflation adjustments, OBBBA/Working Families Tax Cuts pages, Publication 17 updates
• ftb.ca.gov — Tax News, 2026 rate schedules, forms

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A Note on This Summary

Rules include phase-outs, eligibility tests, and state-specific adjustments, so individual results vary. This is a high-level summary based on IRS Revenue Procedure 2025-32, FTB 2026 indexing announcements, and OBBBA provisions as reported through November 2026. For your specific situation, use updated tax software or consult a tax professional, and confirm the latest official guidance before filing.

Have questions about how these changes affect your 2026 taxes? Schedule an appointment or contact us — we serve Hesperia, Victorville, Apple Valley, and the High Desert.