Quick answer
Common 2026 deductions include traditional 401(k) and IRA contributions, HSA contributions, student loan interest (up to $2,500), and self-employment expenses. If you itemize, you can deduct mortgage interest, state and local taxes, charitable gifts and medical costs above 7.5% of AGI. Credits like the Child Tax Credit cut your bill dollar-for-dollar.
Every dollar you deduct on your taxes is money that isn't taxed. In the 22% tax bracket, a $1,000 deduction saves you $220. Yet millions of Americans miss deductions they're entitled to — leaving hundreds or thousands of dollars on the table. Here's every deduction and credit you should know about in 2026.
Standard Deduction vs. Itemizing: The First Decision
| Filing Status | 2026 Standard Deduction |
|---|---|
| Single | $16,100 |
| Married Filing Jointly | $32,200 |
| Head of Household | $24,150 |
| 65+ or Blind | Additional $2,050 (single) or $1,650 (married) |
Take the standard deduction unless your itemized deductions exceed these amounts. About 90% of filers benefit more from the standard deduction.
"Above the Line" Deductions (Everyone Gets These)
These reduce your Adjusted Gross Income (AGI) regardless of whether you itemize:
- Traditional IRA contributions: Up to $7,500 ($8,600 if 50+) — if not covered by a workplace plan
- HSA contributions: $4,300 (individual) or $8,550 (family) — triple tax-advantaged
- Student loan interest: Up to $2,500/year (income limits apply)
- Self-employment tax: Deduct 50% of self-employment tax
- Self-employed health insurance: Full premium deduction
- Educator expenses: Teachers can deduct up to $300 for classroom supplies
- 401(k)/403(b) contributions: Up to $24,500 ($32,500 if 50+) — reduces taxable income automatically
Itemized Deductions (If You Exceed the Standard Deduction)
Medical Expenses
You can deduct medical expenses exceeding 7.5% of your AGI. On an $80,000 AGI, only medical expenses above $6,000 are deductible. Qualifying expenses include premiums (if not pre-tax), surgery, dental, vision, prescriptions, and medical travel.
State and Local Taxes (SALT)
Deduct up to $10,000 in combined state income taxes, local income taxes, and property taxes. This cap hits hardest in high-tax states like New York, New Jersey, and California.
Mortgage Interest
Deduct interest on mortgages up to $750,000 (loans originated after Dec. 15, 2017). On a $350,000 mortgage at 6.5%, that's approximately $22,000 in deductible interest in the first year.
Charitable Contributions
- Cash donations to qualified charities (up to 60% of AGI)
- Donated goods at fair market value (clothes, furniture, vehicles)
- Mileage for charitable driving: 14 cents/mile
- Keep receipts for all donations over $250
Tax Credits (Even Better Than Deductions)
Credits reduce your tax bill dollar-for-dollar, making them more valuable than deductions:
| Credit | Maximum Amount | Who Qualifies |
|---|---|---|
| Child Tax Credit | $2,000/child | Children under 17, income limits apply |
| Child & Dependent Care Credit | $1,050–$2,100 | Daycare/childcare expenses while you work |
| Earned Income Tax Credit | Up to $7,830 | Low-to-moderate income workers |
| American Opportunity Credit | $2,500/student | First 4 years of college |
| Lifetime Learning Credit | $2,000/return | Any post-secondary education |
| Saver's Credit | $1,000 (single) / $2,000 (married) | Low-income retirement savers |
| Energy Efficient Home Credit | Up to $3,200 | Solar panels, heat pumps, insulation, etc. |
| EV Tax Credit | Up to $7,500 | Qualifying new electric vehicles |
Self-Employed? Don't Miss These
- Home office deduction: $5/sq ft up to 300 sq ft ($1,500 simplified method) or actual expenses
- Business mileage: 67 cents/mile in 2026
- Business equipment: Section 179 allows full deduction of business equipment in the year purchased
- Professional development: Courses, conferences, certifications, and books related to your business
- Software and subscriptions: Business-related tools and services
- SEP-IRA or Solo 401(k): Self-employed retirement plans allow contributions up to $69,000/year
Read our side hustle tax guide for complete freelancer and self-employment tax strategies.
Maximize Your Tax Savings
The best tax strategy is year-round planning, not last-minute scrambling. Maximize your retirement contributions to reduce taxable income, and check your Financial Health Score to see how tax-smart money moves improve your overall financial picture.
Frequently Asked Questions
What is the 2026 standard deduction?
$16,100 for single filers, $32,200 for married filing jointly, and $24,150 for head of household.
What is the difference between a tax deduction and a tax credit?
A deduction lowers your taxable income; a credit lowers your tax bill directly. A $1,000 credit saves $1,000, while a $1,000 deduction saves $220 in the 22% bracket.
Can I deduct 401(k) contributions?
Traditional 401(k) contributions are made pre-tax, reducing taxable income automatically — up to $24,500 in 2026 ($32,500 if 50 or older).
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Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Figures are estimates based on publicly available data at the time of writing. Consult a qualified professional about your situation.