Big Tax Changes Coming in 2026: What New Yorkers Need to Know
As 2026 approaches, tax experts are telling New Yorkers to start planning now to avoid unpleasant surprises when they file in April. With several major federal changes taking effect in the coming year, taking action before December 31 could have a big impact on your wallet.
Direct File Program Ends in 2026
One of the biggest shifts is the end of IRS Direct File, the free online tax filing system rolled out under the Biden administration. The Trump administration announced it will be discontinued, saying the private sector is better positioned to handle electronic tax filing. While the program was used by nearly 300,000 taxpayers in 2025, double from the year before, it will not return next tax season, meaning filers may have to turn to paid services or the often-confusing free file options already available.
Bigger Deductions and New Rules
New York taxpayers will also see changes under the new One, Big, Beautiful Bill Act. The standard deduction is getting a boost, and qualifying seniors can add an extra $6,000 to that deduction. With an estimated 86% of taxpayers expected to take the standard deduction in 2026, most filers won’t need to itemize, but some strategic planning could still save money.
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Tax experts recommend “bunching” itemized deductions like medical expenses or charitable gifts into one year to potentially exceed the standard deduction threshold. This could be especially useful for New Yorkers who donate regularly or anticipate large medical bills.
Charitable Giving Limits
Starting in 2026, new limits will apply to charitable deductions. Taxpayers will receive an above-the-line deduction of up to $1,000 for individuals or $2,000 for married couples, even if they take the standard deduction. However, high earners who plan to itemize should be aware of new rules capping deductions and requiring charitable gifts to exceed 0.5% of their adjusted gross income to qualify.
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If you’re planning a significant donation, you may want to consider donating before December 31 to avoid the new restrictions.
Auto Loan Interest Credit
Another tax perk: taxpayers who purchased an American-made car assembled in the U.S. may be eligible to deduct up to $10,000 in auto loan interest. This benefit phases out for single filers earning over $100,000 or joint filers earning over $200,000.
Get Help Before Year’s End
With these changes coming, local tax filers, especially seniors, high earners, and those who donate often, may benefit from consulting a CPA or personal financial specialist to map out a 2026 tax strategy.
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