2027 Filing Season: What’s New on 2026 Tax Returns?

The 2027 filing season is when many of the new tax-law reporting changes become part of the everyday return workflow. That means new boxes on forms, new questions for clients and more opportunities for a preparer to miss something small.

Here’s the practical watchlist for preparing tax year 2026 returns.

1. Expect new W-2 codes

Form W-2 now has Box 12 codes TP for cash tips reported to an employer, TT for qualified overtime compensation and TA for certain employer Trump account contributions. Box 14b adds Treasury Tipped Occupation Codes.

Code TP is not automatically the qualified tips deduction. Your team needs to check the occupation and eligibility. Code TT is already the qualified premium—don’t calculate it twice.

Take code TP as an example. A server’s W-2 might show $16,400 of reported cash tips; another employer might report tips from an occupation that doesn’t qualify. Combining everything without checking Box 14b can produce the wrong deduction even though the data entry matches the W-2s. Likewise, code TT reports the qualified overtime premium, not all overtime pay. The form changed because the questions changed.

Train preparers to distinguish what the form reports from what the tax law allows. That’s a useful rule well beyond these new codes.

2. Keep Schedule 1-A on your radar

The deductions for qualified tips, qualifying overtime, eligible car loan interest and taxpayers age 65 or older may be available even when a taxpayer doesn’t itemize. Each has eligibility requirements, limits and possible income phase-outs.

Don’t assume every hourly worker qualifies for overtime relief, every vehicle loan qualifies or every senior receives the full deduction. Build targeted questions into intake instead of waiting for a reviewer to catch the missing details.

A useful practice exercise is to give the team four hypothetical clients: one with tips, one with overtime, one who financed an eligible new personal vehicle and one who is 65 or older. Ask what additional information is needed for each claim. The answers should include things such as occupation, FLSA status, vehicle and loan details, filing status, valid SSN and modified adjusted gross income.

Even when an amount is reported correctly, a deduction can shrink because income exceeds the applicable threshold. Entering the maximum deduction without checking the cap or phase-out is an easy error to make when everyone is rushing.

3. Review SALT and charitable deductions together

The 2026 SALT limit is $40,400 for most filing statuses, with a phase-down at higher incomes. There’s also a new deduction for certain cash charitable contributions by non-itemizers and a new floor for itemized charitable contributions.

A client with high property taxes isn’t automatically better off itemizing. Run the full comparison.

For married couples filing jointly, the $40,400 SALT ceiling isn’t two separate $40,400 allowances. And for high-income clients the cap itself can be reduced. Follow the applicable Schedule A worksheet before you tell someone their property taxes will create a large deduction.

The charitable rules bring a second decision. Some non-itemizers can deduct qualifying cash gifts within the new limits, while itemizers face the 0.5%-of-AGI floor. A quick comparison of itemized deductions against the standard deduction can change the recommendation entirely. That’s why these topics belong in the same review conversation.

4. Look for income with no 1099 attached

For many 2026 payments, the Form 1099-NEC and common Form 1099-MISC reporting thresholds rise to $2,000. Business clients still have filing responsibilities, and individual clients still must report taxable income even when no form arrives.

Ask how the client was paid—not just which 1099s they received.

Imagine a self-employed client who received five payments of $1,800 from different customers. Those customers may not have an obligation to issue Forms 1099-NEC for those payments under the new general threshold, yet the client still has $9,000 of business receipts to consider. The correct intake question is “How were you paid?” not “Which tax forms came in the mail?”

Business clients also need accurate vendor tracking. Don’t let the higher reporting threshold become an excuse to stop collecting Forms W-9 or reconciling cash, app and card payments to the books. Different payment types and 1099 boxes can follow different reporting rules.

5. Prepare clients for refund and payment changes

The IRS continues moving toward electronic refunds. Collect accurate direct-deposit information early and confirm account ownership and routing details using your firm’s procedures.

If you file information returns for clients, the IRS has announced the retirement of FIRE and the move to IRIS for the 2027 season. Confirm that your software or filing workflow is ready.

There are also changes clients may remember from advertisements that no longer apply to 2026 activity. Certain federal energy-efficiency and clean-vehicle credits ended for new qualifying activity after their respective 2025 cutoff dates. If someone installed solar equipment or purchased a vehicle expecting last year’s incentive, review the actual purchase or placed-in-service date instead of assuming the credit is still available.

For refunds, make sure your intake collects accurate routing and account numbers in a secure way. An electronic refund only works when the banking information is correct. For direct 1099 filing, confirm IRIS access or the software provider’s process before January rather than waiting for a rejected submission.

One final reminder

Forms and instructions can change before filing season begins. Check the final 2026 forms, the IRS’s announced opening date and any later guidance before your team starts transmitting live returns.

The best pre-season update isn’t an information dump. It’s a small change to your forms, software tests and review questions that catches the issue automatically. Make a short “What’s new for 2026 returns?” page for staff and link it to the deeper topic guides when somebody needs more detail. A prepared team shouldn’t have to research the entire new law every time it sees an unfamiliar code.

The takeaway: Don’t make your team relearn every change at the preparation screen. Use the Forms and Schedules Cheat Sheet 2026 as a desk reference, and keep deadlines and milestones visible with the free Tax Professional Calendar.

Official source: IRS — Working Families Tax Cuts, individuals and workers, IRS — 2026 W-2 and W-3 Instructions.

For general education for tax professionals; reviewed October 23, 2026. Confirm current forms and guidance before relying on tax-law details.