The IRS has finalized the standard deduction amounts for tax year 2026, which taxpayers will apply when filing in early 2027. They arrive alongside an enhanced deduction for qualifying seniors that can materially change retirement-year planning.
For most households, the new amounts reinforce a multi-year trend: fewer taxpayers need to itemize. For small business owners, the standard deduction applies only to personal income — business deductions are claimed separately on Schedule C or the entity return, and the two should never be conflated.
The 2026 Amounts
| Filing Status | 2026 Standard Deduction |
|---|---|
| Single / Married Filing Separately | $16,100 |
| Married Filing Jointly / Surviving Spouse | $32,200 |
| Head of Household | $24,150 |
These apply to the 2026 tax year (returns filed beginning January 2027). Taxpayers filing 2025 returns this spring should continue to use the 2025 figures.
Additional Deductions for Age 65+
The traditional age-65 addition is $2,050 for many unmarried filers and $1,650 per qualifying spouse for joint filers. The enhanced senior deduction adds up to $6,000 per eligible senior — and, notably, is available even to seniors who do not itemize — subject to a MAGI phase-out beginning at $75,000 (single) / $150,000 (joint).
Stacking rule
A qualifying senior can combine the base standard deduction, the age-65 add-on, and the enhanced senior deduction in the same year, provided the MAGI phase-out has not been reached. The combined total can exceed $24,000 for an unmarried senior — enough to render most retirement-age returns straightforward.
Three Strategic Implications
- Fewer households benefit from itemizing — with the joint deduction at $32,200, itemized totals must exceed that before itemizing helps
- Record-keeping can be simplified for those who no longer itemize — but business substantiation discipline stays fully intact
- Retirees gain a larger safety net, particularly those under the MAGI phase-out thresholds
A Reminder for Business Owners
Taking the standard deduction does not limit your ability to deduct business expenses. The standard deduction applies to your personal Form 1040; business expenses are deducted on Schedule C, Form 1065, or Form 1120-S, entirely independently. Taking the standard deduction personally and deducting every legitimate business expense is the norm for the vast majority of small business owners.
Key takeaway
The 2026 increases alone are modest, but the stacked senior deduction structure can shield a substantial portion of retirement income from federal tax. Planning is most valuable in the years approaching age 65 and in any year MAGI may cross the phase-out threshold.
SMAART Tax Team
CPAs & Enrolled Agents, SMAART Tax
