It’s official—the IRS is rewriting the rules following the One Big Beautiful Bill Act—and your refund could change dramatically

Did you know your IRS refund could be higher this year? Exactly, you’ve read right! Some important changes are coming with the 2026 tax season, and they are part of the One Big Beautiful Bill Act that modifies several tax laws. If you don’t know anything about this, you could be losing a great amount of money you could legally claim. So, today, we are going to explain to you the most important 20 deductions you could use this year (mostly if you are a teacher or a self-employed worker). Let’s make sure you get the most out of your IRS refund!

State taxes and home savings

1. SALT Deduction (local and state taxes): you could deduct either your state income taxes or your state sales taxes. What’s new for 2026 is that the limit temporarily increases to $40,000, which is a huge jump from before.
2. Property taxes: If you own a house (or even a second one), you could deduct taxes you pay for it. This deduction counts toward the SALT limit.
3. Mortgage interest: if you bought a house after 2017, you can deduct mortgage interest on loans up to $750,000. This is one of the strongest deductions available to homeowners.

Working at home and special situations

1. Home office: this deduction is just for self-employed workers, it doesn’t apply for W-2 workers who work from home. You can deduct $5 per square foot (up to 300 sq. ft.), or actual expenses based on the percentage of your home used only for work.
2. Moving expenses for military: If you are an active-duty military and you move by an official order, any expense not refund is deductible.
3. Losses from disasters or theft: you can deduct these losses only if the event was declared a federal disaster—like hurricanes, wildfires, and similar situations.

Health and medical deductions

1. Mental and dental expenses: you can deduct what you paid from your own pocket (glasses, therapies, surgeries, etc.), but these expenses must be over 7.5% of your AGI (adjusted gross income).
2. Health insurance for self-employed workers: if you are a self-employed worker, you should know you could deduct 100% of your medical, dental, and long-term care insurance premiums.
3. HSA contributions: Everything you deposit in an HSA is totally deductible. The limits for 2025 are: $4,300 individual; and $8,550 familiar.

Education, family, and other benefits

1. Student loan interests: you can deduct up to $2,500 with no need of itemizing deductions.
2. Teacher expenses: K-12 teachers can deduct up to $300 for materials they bought with their own money.
3. Alimony: this is only deductible if the divorce finished before December 31 of 2018.
4. Charitable donations: if you itemize your deductions, you can deduct donations. Generally, you can deduct up to 60% of your AGI.
5. Gambling losses: you can deduct gambling losses up to the amount of your gambling winnings.
6. Jury duty pay: if your employer is still paying you during jury duty but requires you to hand over the jury check, you can deduct that amount.

Deductions for self-employed and retirement

This point has more stronger deductions and are the ones that can help you the best increasing your IRS refund.

1. Traditional IRA contributions: they can be deductible, depending on whether you have access to a retirement plan on your job.
2. SEP, SIMPLE, and Solo 401(k) Plans: small business owners can deduct large contributions to these retirement plans.
3. Business expenses: if you are self-employed, you can deduct any ‘’ordinary and necessary’’ business expense, including: equipment, advertising, licenses, and supplies. The expenses go on Schedule C.
4. QBI deduction: Many small business owners can deduct up to 20% of their net business income.
5. Self-employment tax: self-employed workers pay 15.3% in FICA taxes, but the IRS allows you to deduct half of that amount on your Form 1040.

FAQ

• Do you need receipts for everything? Generally you do, especially if you are going to itemize deductions on your IRS refund. But, the standard deduction and the simplified home office method doesn’t require any receipts.
• What happens if my expenses are not enough to itemize? If the total of your itemized deductions are lower than the standard deduction ($15,750 for single filers in 2026), it’s better to take the standard deduction according to IRS rules.