January 20, 2026
New tax legislation means that Individuals and entrepreneurs can leverage various deductions and credits in 2026.
With ample new tax breaks available to them, individuals and businesses can potentially get larger refunds, trim their tax bills, and greatly cut costs during the approaching tax-filing season. They are entering a new period of tax planning under new tax laws, where they could benefit from leveraging widespread changes such as the earned income tax credit for individuals and a hefty deduction for seniors.
In the business world, there are tax deductions tied to retirement plans they offer employees, deductions for asset and equipment costs, and other investment tax breaks.
Many of the changes stem from the One Big Beautiful Bill Act passed in July 2025. It means that individuals and entrepreneurs can leverage numerous deductions and credits. The law comes as the IRS tax deadline for filing 2025 individual returns for most people is April 15.
On average, people are expected to save nearly $3,000 in 2026, with about 85% of households getting a tax cut. Companies and small businesses will get extended tax cuts, yet how much they might pocket could vary depending on income and deductions.
Bria Harris, the owner and CEO of Impress Tax Service, shared with BLACK ENTERPRISE some best strategies individuals and businesses may do well to consider with the IRS, indicating the first day of filing occurs on Jan. 26. With a doctorate in philosophy, accounting, and business, Harris is a certified tax expert with 10 years of industry experience.
She stated that many Americans are expected to receive larger federal refunds this year, with analysts estimating that the average refund could be about $1,000 higher and that total refunds nationwide could be tens of billions of dollars more than last year.
She indicated a significant portion of the boost may come from enhancements to the child tax credit (now up to $2,200 per qualifying child) and the earned income tax credit (up to about $8,231 for families with three or more children).
However, not everyone will qualify for the increase. Harris says eligibility depends on income, filing status, SSN requirements, and whether each taxpayer meets the rules for the credits. To maximize benefits, she suggested that taxpayers review their eligibility for the expanded credits, adjust their withholding early, and file electronically with direct deposit for faster refunds.
When filing returns this year, she says individuals should confirm they are using the updated standard deduction amounts for 2025 returns. They are $15,750 for singles, $31,500 for married filing jointly, and $23,625 for head of household. She says those deductions directly lower taxable income and can largely boost tax savings or refunds.
Harris explained that seniors and those who are blind may qualify for additional deductions, including the new $6,000 senior bonus deduction that can further trim their tax bill. When filing with a professional tax office, like Impress Tax Service, and answering all questions accurately, the tax software will automatically apply the credits and deductions a taxpayer qualifies for.
On the “no tax on tips” and “no tax on overtime” provisions, she says not all occupations will benefit equally. Harris says the tip deduction mainly applies to workers in jobs that customarily and regularly receive voluntary tips. They include servers, bartenders, hotel staff, valets, taxi drivers, hairstylists, barbers, nail techs, massage therapists, entertainers, and delivery workers, among others.
She says the overtime deduction is broader and based on whether an employee receives qualified overtime pay under federal wage rules, not on occupation, so many hourly workers across industries may benefit from that portion.
She says even if someone doesn’t qualify for the tip or overtime benefits, they may still see tax savings from the higher standard deduction and expanded credits for individuals if eligible.
Under recent tax law updates, Harris says the adoption tax credit for 2025 and beyond has been expanded and is now partially refundable. She says it allows qualifying families to receive up to $17,280 per eligible child, with up to $5,000 potentially refundable, even if they have little or no tax liability. “This update helps make adoption more affordable by increasing direct tax savings and the chance of a larger refund at filing time.”
However, the credit is subject to income phase-out limits, so higher-income taxpayers may see the credit reduced or eliminated. Families must meet strict eligibility rules, including adopting an eligible child and having properly documented qualified adoption expenses. “Because the rules are detailed and income-sensitive, taxpayers should review their situation with a professional to ensure they maximize the credit correctly.”
For individual taxpayers, Harris says maximizing retirement contributions is one of the smartest ways to lower your tax bill now while building long-term wealth. The reason: Contributions to a traditional 401(k) or traditional IRA are made pre-tax, which directly reduces taxable income for the year. Conversely, she says Roth contributions don’t lower taxes today but allow earnings to grow tax-free, which is extremely valuable in retirement.
She recommended taxpayers try to contribute as much as they possibly can, review income limits for Roth eligibility and IRA deductions, and use credits like the Saver’s Credit when eligible to optimize immediate tax savings and long-term financial growth.
For business owners, Harris says one of the most powerful tax moves right now is offering or contributing to employees’ 401(k) or IRA plans. She says they can generate tax credits for startup plans, employer contributions, and auto-enrollment, while also allowing employer contributions to be fully deductible as a business expense.
She advises that companies should also evaluate capital purchases and investments for benefits like Section 179 expense and bonus depreciation. She says it allows them to deduct large amounts of equipment and asset costs upfront instead of over time.
In addition, qualifying R&D expenses may generate valuable credits, and expanded business interest deductions can further reduce taxable income. “Strategic tax planning before year-end helps businesses lower current tax liability, improve cash flow, and create long-term tax efficiency for future years.”
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