Purchasing a home is one of the biggest investments that a person can make.  Fortunately, there are many potential tax benefits for homeowners, including tax deductions, credit opportunities, and other incentives. 

The State of New Jersey’s Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) property tax relief program will officially open for 2026 in August.  This year’s ANCHOR benefits are based on the taxpayer’s residency, income, and age from tax year 2025.  Eligible taxpayers must be a New Jersey resident who have owned or rented their main home since October 1, 2025 and paid property taxes or rented a property subject to property taxes.

Higher education costs are always increasing, but there are several tax incentives available to taxpayers to help offset those costs.  Coverdell education savings accounts, qualified tuition programs, the American opportunity tax credit, the lifetime learning credit, education savings bonds, and the student loan interest deduction are all avenues that taxpayers can explore. 

In mid-July, the IRS made a rare announcement that they would setting a higher optional standard mileage rate, used to calculate the deductible costs of operating a vehicle for certain purposes, for the remainder of 2026.  The IRS identified an increase in fuel costs as the driving factor.  The American Automobile Association (AAA) observed that the average price for a gallon of gas on January 8, 2026 was $2.819 a gallon, and it had risen to $3.890 a gallon on July 15, an increase of 38%.

In July 2026, the IRS announced a new automatic process designed to provide penalty relief for taxpayers who have a history of timely filings and payments, thereby reducing the need for them to request assistance from the IRS.  The long-standing First Time Abate administrative relief will soon be replaced by the Automatic Exemption from Penalty (AEP) process.  The new process aims to simplify and make more consistent the tax-paying process, as well as lessen the burden on taxpayers who have a timely compliance history, by cutting out the step of making a formal request for relief that is generally granted anyway.

The school year may be ending, but eligible educators and teachers should be aware that they could be eligible for a deduction for certain out of pocket expenses paid for their classrooms throughout the year.  Many teachers use their own money to buy supplies and are not reimbursed for it.  For 2026, eligible educators and teachers may be able to claim an above-the-line deduction in computing their adjusted gross income (AGI) for qualifying expenses.

In early May, the IRS issued final regulations surrounding the qualified tips deduction enacted as part of the One Big Beautiful Bill Act (OBBBA).  These rules clarify which occupations “customarily and regularly” receive tips and which tips qualify for the deduction.  The regulations apply to tax years beginning after December 31, 2024 with an effective date of June 12, 2026.

For the past several years, most donors have received little to no federal tax benefit for giving to charity. Taxpayers who claimed the standard deduction could not deduct traditional charitable contributions. To receive a tax benefit, a donor had to itemize on the return. Beginning in 2026, that changes. The One Big Beautiful Bill Act (OBBBA) creates a permanent universal charitable deduction for taxpayers who take the standard deduction, which today applies to roughly 86% of filers. For nonprofit organizations, this provides federal incentive to a larger group of potential donors.

Now is a great time to review your finances and plan for 2026 taxes.  Taxpayers have opportunities to take advantage of beneficial deductions which can reduce their federal tax liability. Some popular strategies include contributions to certain retirement plans, contributions to health savings accounts (HSAs), and student loan interest deductions.

The IRS has announced that the 1.3 million taxpayers who have unclaimed tax refunds for tax year 2022 have until April 15, 2026 to submit their returns.  It is estimated that more than $1.2 billion in refunds is as yet unclaimed, with a median refund of $686.