Financial specialists are encouraging taxpayers to begin planning now, as the 2025 tax changes will heavily influence next year’s filings. Acting ahead of time can help Americans avoid costly mistakes and secure better financial outcomes.
Dan Snyder, director of financial planning at the American Institute of CPAs (AICPA), noted in a recent announcement that preparing before the end of 2025 can significantly strengthen financial health in 2026.
With numerous updates affecting both tax law and personal finance, Snyder stressed the importance of understanding these adjustments before April 15, 2026.
IRS Direct File Will Be Eliminated in 2026
One of the biggest updates is that the IRS Direct File program—introduced under President Joe Biden—will not return next year. Earlier this month, the Trump administration confirmed the free online filing tool will be discontinued.
Though many taxpayers praised Direct File for being fast, simple, and free, Republican lawmakers argued that the system duplicated existing programs and wasted government funds. Commercial tax preparation companies, which profit from paid filing software, also criticized the platform.
Why Direct File Is Ending
Treasury Secretary Scott Bessent, who also serves as the current IRS commissioner, shared that the program had low usage and that private companies could provide more effective filing tools.
He said there were “better alternatives” than Direct File and emphasized that the system “wasn’t used very much.”
According to a Freedom of Information Act request from the Center for Taxpayer Rights, IRS data shows that:
- 296,531 accepted returns were filed through Direct File for the 2025 tax season
- Up from 140,803 in 2024
Although usage nearly doubled, the program will still be discontinued.
Tax Changes That May Increase Your Paycheck in 2026
Under the Trump administration’s One, Big, Beautiful Bill Act, several tax adjustments may boost take-home pay next year even without a raise:
Key Highlights
- Higher standard deduction for most filers
- Additional $6,000 bonus deduction for eligible seniors
- New opportunities and limitations for charitable deductions
- Potential write-offs for interest paid on certain American-made car loans
How To Prepare: Tax Tips for 2026 Filers
1. Consider “Bunching” Itemized Deductions
AICPA recommends that taxpayers evaluate whether grouping several years’ worth of itemized deductions into one tax year may produce more tax savings than taking the standard deduction.
The Tax Foundation estimates that roughly 86% of taxpayers will choose the standard deduction in 2026.
2. Understand the New Charitable Giving Limits
Beginning in 2026, several new rules will apply:
Above-the-Line Charitable Deduction
- $1,000 for single filers
- $2,000 for married couples filing jointly
Even those who take the standard deduction can still deduct cash donations to qualifying charities under these rules.
New Charitable “Floor” for Itemizers
- Only donations above 0.5% of a filer’s adjusted gross income (AGI) will be deductible.
- Taxpayers who regularly donate may want to complete contributions before December 31 to avoid the new threshold.
3. Write Off Auto Loan Interest for U.S.-Built Cars
Taxpayers who purchased American cars assembled in the U.S. may qualify to deduct up to $10,000 in interest on auto loans.
However, this benefit phases out for individuals earning more than $100,000, or $200,000 for married couples.
4. Work With a CPA Early
Snyder urges taxpayers to partner with a CPA or CPA personal financial specialist soon. Early planning allows individuals to create a solid tax strategy, maximize deductions, and prepare effectively for the 2026 tax year.
With so many 2025 tax changes set to influence the 2026 filing season, preparing early can prevent mistakes, increase savings, and ensure taxpayers make full use of new deductions and credits.
From the elimination of IRS Direct File to new rules for standard deductions, charitable contributions, and auto loan interest, being informed now can mean a significantly easier tax season later. Starting early, reviewing financial plans, and consulting tax professionals will help Americans stay ahead of the evolving tax landscape.
