Your Complete Tax
Preparation Guide 2026

For 2026, the seven federal tax brackets for single filers are: 10% on income up to $12,400; 12% on $12,401–$50,400; 22% on $50,401–$105,700; 24% on $105,701–$201,775; 32% on $201,776–$256,225; 35% on $256,226–$640,600; and 37% on income over $640,600. Married filing jointly brackets are roughly double the single brackets. These rates apply to taxable income (after deductions), not gross income.

The deadline to file your 2025 federal income tax return is April 15, 2026. You can request a six-month extension to October 15, 2026, using Form 4868. However, an extension to file is not an extension to pay — any taxes owed must still be paid by April 15 to avoid penalties and interest.

The standard deduction for the 2026 tax year (returns filed in 2027) is $16,100 for single filers and married filing separately, $32,200 for married filing jointly and surviving spouses, and $24,150 for head of household. Additional amounts apply for taxpayers who are 65 or older or blind.

Several free options are available: IRS Free File (for AGI of $84,000 or less), IRS Direct File (in participating states), Free Fillable Forms (any income level), VITA (for income under $67,000), and commercial options like Cash App Taxes and FreeTaxUSA. All provide free federal filing; state filing availability varies.

Take whichever is larger. If your total itemized deductions (SALT up to $10,000, mortgage interest, charitable donations, medical expenses over 7.5% of AGI) exceed your standard deduction, itemize. About 90% of taxpayers benefit more from the standard deduction after it was nearly doubled by the Tax Cuts and Jobs Act.

The self-employment tax rate is 15.3%, consisting of 12.4% for Social Security (on the first $184,500 of net earnings in 2026) and 2.9% for Medicare (no cap). An additional 0.9% Medicare tax applies to earnings over $200,000 (single) or $250,000 (married filing jointly). Only 92.35% of net earnings are subject to SE tax, and you can deduct 50% of the SE tax on your income tax return.

A deduction reduces your taxable income, so its value depends on your tax bracket (e.g., a $1,000 deduction in the 22% bracket saves $220). A tax credit directly reduces your tax bill dollar-for-dollar ($1,000 credit = $1,000 less in tax). Credits are generally more valuable. Some credits are refundable, meaning they can result in a refund even if they exceed your tax liability.

For 2026, long-term capital gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on your taxable income. For single filers: 0% up to $49,450, 15% from $49,451 to $545,500, and 20% above $545,500. An additional 3.8% Net Investment Income Tax may apply if your MAGI exceeds $200,000 (single) or $250,000 (MFJ). Short-term gains are taxed as ordinary income.

For 2026, the employee contribution limit for 401(k), 403(b), and most 457 plans is $24,500. Workers aged 50–59 and 64+ can contribute an additional $8,000 in catch-up contributions (total: $32,500). A special "super catch-up" for ages 60–63 allows $11,250 extra (total: $35,750). The total contribution limit including employer contributions is $72,000.

The IRA contribution limit for 2026 is $7,500 for both Traditional and Roth IRAs combined. The catch-up contribution for those 50 and older is $1,100, for a total of $8,600. For Roth IRA eligibility, phaseouts begin at $153,000 for single filers and $242,000 for married filing jointly.

You generally must make estimated tax payments if you expect to owe $1,000 or more when you file your return and your withholding won't cover at least 90% of your current year's tax liability (or 100% of last year's, 110% if AGI exceeded $150,000). This commonly applies to self-employed individuals, freelancers, and those with significant investment income. Quarterly due dates are April 15, June 15, September 15, and January 15.

If you owe taxes and miss the April 15 deadline without filing an extension, you face two penalties: failure-to-file (5% per month of unpaid taxes, up to 25%) and failure-to-pay (0.5% per month, up to 25%). Interest also accrues daily. If you're owed a refund, there's no penalty for filing late — but you should still file to claim your refund. You have three years from the original due date to claim a refund.

The QBI deduction allows owners of pass-through businesses (sole proprietorships, partnerships, S-corps) to deduct up to 20% of their qualified business income. This deduction is subject to limitations based on taxable income, the type of business, and the amount of W-2 wages the business pays. It's available in addition to the standard or itemized deduction.

The general rule is to keep tax records for at least three years from the date you filed or the due date (whichever is later). Keep records for six years if you underreported income by more than 25%. Keep them for seven years if you claimed a loss from worthless securities or bad debt. Records related to property should be kept until the statute of limitations expires for the year you dispose of the property. When in doubt, keep records longer.

If you are self-employed and use a portion of your home exclusively and regularly for business, you can claim the home office deduction. There are two methods: the simplified method ($5 per square foot, up to 300 sq ft = $1,500 max) or the regular method (actual expenses based on the percentage of your home used for business). Important: W-2 employees cannot claim this deduction, even if they work from home.

A Health Savings Account (HSA) offers a triple tax advantage: contributions are tax-deductible (reducing your AGI), investments grow tax-free, and withdrawals for qualified medical expenses are tax-free. For 2026, contribution limits are $4,400 (self-only coverage) and $8,750 (family coverage), with a $1,000 catch-up for those 55+. You must have a high-deductible health plan (HDHP) to contribute.