IRS Tax Changes for 2026: Deadlines, Limits, and What Buffalo Filers Need to Know

Tax season arrives at the same time every year and still manages to catch people off guard. The rules change, the limits move, and the deadline feels closer than it should for something that was never actually a surprise.

The 2026 tax year brings more changes than usual. The One Big Beautiful Bill Act, passed in mid-2025, reshaped deductions, credits, and reporting rules. Many of those changes took effect for 2025 returns and carry into 2026 with inflation adjustments. Others take effect for the first time on 2026 returns. A few popular credits are gone entirely.

For individuals, entrepreneurs, and business owners in the Buffalo area, knowing what changed is the first step in preparing well. Good preparation starts with the right numbers, not last year’s.

What Changed for the 2026 Tax Year

Standard Deduction

The standard deduction for 2026 is $16,100 for single filers and married filing separately. It is $32,200 for married couples filing jointly and $24,150 for head of household. Most individuals with straightforward finances take the standard deduction because it exceeds their itemized total.

SALT Deduction Cap

The cap on state and local tax deductions rose from $10,000 to $40,000 for 2025. It rises to $40,400 for 2026, or half that for married filing separately. The cap phases down for taxpayers with modified adjusted gross income above $505,000, but it can’t drop below $10,000. For Western New York homeowners, that makes itemizing worth a second look, especially if the old $10,000 cap previously made itemizing not worthwhile.

New Deductions for Tips, Overtime, Car Loans, and Seniors

Several deductions introduced for 2025 continue through 2028 unless extended:

• A deduction for qualified tip income, up to $25,000
• A deduction for the premium portion of qualified overtime pay, up to $12,500, or $25,000 for joint filers
• A deduction for interest on qualifying new-vehicle loans, up to $10,000
• An additional $6,000 deduction for taxpayers 65 and older

These deductions are available whether or not you itemize, but they don’t reduce adjusted gross income. Each has income limits and eligibility rules.

Child Tax Credit

The Child Tax Credit remains $2,200 per qualifying child under 17, subject to income phase-outs.

Energy Credits Ended

The Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit ended for expenditures after December 31, 2025. The first covered solar, wind, geothermal, and battery storage. The second covered insulation, windows, heat pumps, and similar upgrades. Improvements made in 2026 don’t qualify for either federal credit. Some state and utility incentives may still apply, so check before you buy.

Retirement Contribution Limits

The 401(k) elective deferral limit for 2026 is $24,500, with an $8,000 catch-up contribution for those 50 and older. Those aged 60 through 63 get a higher catch-up of $11,250. The IRA contribution limit rises to $7,500, with a $1,100 catch-up for those 50 and older.

Information Reporting Thresholds

The reporting threshold for 1099-NEC and 1099-MISC forms rises from $600 to $2,000 for payments made in 2026. The 1099-K threshold for payment platforms stays at more than $20,000 in payments and more than 200 transactions. The One Big Beautiful Bill Act restored that threshold, reversing a phased reduction that had lowered it to $5,000 for 2024. None of these thresholds changes what counts as taxable income. Any taxable income you received still has to be reported, whether or not a form arrives.

Marketplace Health Insurance

Starting with 2026 returns, the caps that previously limited how much excess advance premium tax credit you had to repay are eliminated. If your actual income ends up higher than your enrollment estimate, you may owe back the full excess when you reconcile on Form 8962. Updating your marketplace income estimate during the year matters more than it used to.

Understanding the Filing Timeline

The IRS typically opens individual tax filing in late January, with the exact date announced in the weeks before. The standard deadline for filing 2026 individual returns is April 15, 2027. An automatic six-month extension is available by filing Form 4868 before that date.

An extension moves your filing deadline to October 15, 2027, but it does not extend the deadline to pay. If you owe money and don’t pay by April 15, interest and penalties accrue from that date, regardless of when the return itself is filed.

For small business owners in Western New York, the timeline shifts by entity type:

• Partnerships and S-corporations file by March 15.
• C-corporations generally file by the 15th day of the fourth month after their tax year ends, which is April 15 for a calendar-year C-corporation.
• Sole proprietors report business income on Schedule C attached to their individual return, following the standard April 15 deadline.

When a deadline falls on a weekend or legal holiday, it moves to the next business day.

Missing a business entity deadline creates late-filing penalties. It can also delay the K-1s that partners and shareholders need to complete their own personal returns.

Estimated tax payments are due quarterly, generally in April, June, September, and January. That makes them part of year-round tax planning rather than something handled only at filing time. The final 2026 estimated payment is due January 15, 2027. Underpaying an installment can result in a penalty calculated from that installment’s due date, separate from any penalty at filing time.

New York note: New York State returns follow the same April 15 deadline. New York does not honor the federal Form 4868 automatically, though. To extend your state return, you file Form IT-370 separately, and as with the federal extension, it extends the time to file, not the time to pay.

Income Documents: What’s Different This Year

The core of tax preparation is accounting for every dollar of income you received. The IRS receives copies of many income documents directly from employers, financial institutions, and other payers, so review those forms carefully and report income accurately.

Employers must send W-2s by January 31, or the next business day when that date falls on a weekend. In 2027, that means February 1. Because of the new $2,000 threshold, freelancers and contractors may receive fewer 1099-NEC forms for 2026. The income is still reportable, so your own records matter more than ever.

K-1 forms from partnerships, S-corporations, estates, and trusts frequently arrive late, sometimes not until March. That timing is one reason returns with K-1 income often need extensions. If a K-1 you’re expecting hasn’t arrived by early March, contact the entity directly rather than risk missing the deadline.

For a full list of what to gather, see our tax season checklist.

Deductions: What You Can Claim

Deductions reduce your taxable income. Claiming every deduction you’re legitimately entitled to is accurate preparation, not aggressive planning.

Itemizing makes sense when your deductible expenses add up to more than your standard deduction. Those expenses include mortgage interest, state and local taxes, charitable contributions, and qualifying medical expenses exceeding 7.5% of adjusted gross income. With the higher SALT cap, more Buffalo-area homeowners may find itemizing worthwhile.

Business owners deduct expenses on Schedule C (sole proprietors) or on the business’s own return, which reduces income before it reaches the individual return. Deductible expenses include:

• Home office use
• Business mileage
• Equipment
• Professional services
• Software subscriptions
• Advertising
• Business insurance

Receipts, mileage logs, and records connecting each expense to a business purpose are required to support the deduction if questioned.

Self-employed health insurance premiums are deductible above the line, reducing adjusted gross income directly. SEP-IRA contributions and the employer-side contribution to a Solo 401(k) can generally be made up until the filing deadline, including extensions, for the prior tax year. The election to make employee elective deferrals into a Solo 401(k), however, must generally be in place by December 31. If you’re weighing year-end moves like these, our year-end tax planning checklist covers the timing.

Credits vs. Deductions

A deduction reduces taxable income, so its value depends on your tax bracket. A credit reduces tax owed dollar for dollar, which generally makes a credit more valuable than an equivalent deduction.

The Child Tax Credit provides up to $2,200 per qualifying child under 17, subject to income phase-outs, and part of it is refundable. The Earned Income Tax Credit (EITC) is a refundable credit for lower- and moderate-income working individuals and families. The Child and Dependent Care Credit covers part of what you paid for care while you worked. The American Opportunity Credit and the Lifetime Learning Credit cover qualifying education expenses.

Each of these has specific eligibility rules and documentation requirements. Missing a credit you qualify for can increase your tax bill. Claiming one without meeting the eligibility rules can lead to an IRS notice and, in some cases, additional tax and interest.

Filing Status and Dependent Information

Filing status determines your tax bracket thresholds, your standard deduction, and your eligibility for certain credits. The five statuses are single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse.

Head of household is one of the most commonly misapplied statuses. It is available to unmarried taxpayers who paid more than half the cost of keeping up a home for a qualifying person. It offers a higher standard deduction and more favorable brackets than filing single, so the IRS pays close attention to how it’s claimed.

Every claimed dependent needs an accurate Social Security number. The IRS uses dependent SSNs to identify duplicate claims. If the same dependent is claimed on more than one return, the affected taxpayers may need to resolve the discrepancy with the IRS.

For divorced or separated parents, the IRS rules on who can claim a child may differ from what a divorce agreement says, and the IRS rule governs the return. Generally, a noncustodial parent can claim the child only if the custodial parent signs Form 8332 releasing the claim.

Common Preparation Mistakes

Several preparation mistakes can lead to IRS notices or electronic filing rejections.

Mismatched Social Security numbers can cause an electronic filing rejection. The name and SSN on your return need to match Social Security Administration records. Even a transposed digit can prevent the return from being accepted electronically.

Forgetting income sources is another frequent problem. A 1099-INT for a small amount of bank interest feels inconsequential, but the IRS received a copy and will notice if it’s missing from your return. With higher 1099 thresholds, more income will arrive without a form at all. Taxpayers sometimes overlook cryptocurrency transactions, freelance side income, rental income, and platform-based business income when gathering their records.

Using last year’s numbers is a new risk this year. Standard deduction amounts, the SALT cap, and retirement limits all changed, and the energy credits are gone. Planning based on 2025 figures can lead to wrong estimates and wrong expectations.

Not reconciling advance premium tax credit payments applies to people who received marketplace health insurance subsidies. The advance credit paid on your behalf gets reconciled on Form 8962 when you file. With the repayment caps now removed, a large gap between your estimated and actual income can mean a larger balance due.

KD Accounting & Tax works with individuals and small business owners across Buffalo and Erie County on tax preparation and planning. The most effective preparation happens throughout the year, not in a scramble between February and April.

Working With a Tax Professional in Buffalo

The value of a tax professional goes beyond completing forms. A good preparer will:

• Review your situation for deductions you might miss
• Verify that credits are applied correctly
• Check whether estimated payments need adjusting
• Communicate with the IRS on your behalf if questions come up after filing

For business owners in Western New York, business returns, personal returns, quarterly payments, and ongoing bookkeeping add up to a year-round relationship with tax compliance rather than a single annual event. For some taxpayers, that ongoing support can make it easier to keep records organized, meet deadlines, identify applicable deductions, and address questions before they become larger problems.

KD Accounting & Tax provides tax preparation and filing services for individuals, sole proprietors, LLCs, S-corporations, and partnerships in the Buffalo metro area. For the 2027 filing season, scheduling in January or early February gives the most room to resolve anything that needs additional documentation.

Frequently Asked Questions