Tax breaks are generally broken into two major categories: tax deductions and tax credits. As you review programs that could apply to you, it helps to understand how each benefit works.
A tax deduction lowers your taxable income by the deduction amount, reducing how much of your earnings you pay tax on. The lower your income, the lower your tax bill. (Example: Say you made $80,000 and were eligible for $20,000 in deductions; the IRS would only tax you on $60,000 of that income.)
A tax credit gives you a direct, dollar-for-dollar reduction in the amount of tax you owe. (Example: If your total tax bill was $3,000 and you qualified for a $2,000 tax credit, you'd owe only $1,000 after the credit was applied.)
Credits and deductions are often grouped under the umbrella term "tax breaks" because, even though they work differently, they share the same goal: to lower your overall tax burden.
Here are some of the most popular tax breaks and links to our other resources to help you learn more.
23 popular tax deductions and tax breaks
The tax breaks below apply to the 2026 calendar year (taxes due April 2027).
1. Child tax credit
The child tax credit (CTC) is a tax break for families with children under age 17. The credit is worth up to $2,200 per child, with $1,700 being potentially refundable. To qualify, you have to meet certain income requirements, and you (or at least one spouse if filing jointly) and your child must have a valid Social Security number.
2. Child and dependent care credit
The child and dependent care credit (CDCC) is meant to cover a percentage of day care and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. This filing season, it's up to 50% of $3,000 of expenses for one dependent or $6,000 for two or more dependents.
3. American opportunity tax credit
The American opportunity tax credit, sometimes shortened to AOTC, lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500. It's also partially refundable, which means you can get up to $1,000 back if the credit zeros out your tax bill.
4. Lifetime learning credit
The lifetime learning credit lets you claim 20% of the first $10,000 you paid toward tuition and fees, up to $2,000. Like the American opportunity tax credit, the lifetime learning credit doesn’t count living expenses or transportation as eligible expenses. You can claim books or supplies needed for coursework.
5. Student loan interest deduction
The student loan interest deduction lets borrowers write off up to $2,500 from their taxable income if they paid interest on their student loans. You don't need to itemize to take advantage of this deduction.
6. Adoption credit
The adoption credit is a tax break that helps taxpayers cover a certain amount of qualified adoption costs per child. The credit begins to decrease incrementally at certain income levels and completely phases out once your modified adjusted gross income (MAGI) exceeds the threshold for that tax year. For this filing season, the credit maxes out at $17,670, with up to $5,120 being refundable. The credit begins to phase out at a MAGI of more than $265,080.
7. Earned income tax credit
The earned income tax credit (EITC) is a refundable tax break for low-income taxpayers with and without children. For 2026, the credit ranges from $664 to $8,231, depending on how many kids you have, your marital status and how much you made.
8. Charitable donation deduction
New this year, non-itemizers can take up to a $2,000 deduction ($1,000 for single filers) for donations made to a qualified IRS charity in 2026. If you itemize, you may be able to write off the value of even more qualifying charitable gifts — whether they’re in cash or property, such as clothes or a car. Per the IRS, as an itemizer, you can generally deduct up to 60% of your adjusted gross income — but there's a new catch this filing season: you must donate at least 0.5% of your adjusted gross income to take this deduction (learn more here).
9. Medical expenses deduction
In general, you can write off qualified, unreimbursed medical expenses that are more than 7.5% of your adjusted gross income for the tax year.
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10. Deduction for state and local taxes
You may deduct up to $40,400 ($20,200 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes through a tax break known as the SALT deduction. However, if you're a high-earner (in this case, making over $505,000), that deduction may be reduced by $0.30 for every dollar over that limit, potentially down to $10,000.
11. Mortgage interest deduction
The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay.
12. Gambling loss deduction
If you lost money gambling and plan to itemize, you may be able to deduct some of your losses. The total amount of losses you can deduct is limited to 90% of your winnings. This statute was included in the "One Big Beautiful Bill Act," which was enacted in July 2025. Prior to OBBBA, you could deduct 100% of your losses against your wins.
13. IRA contributions deduction
You may be able to deduct contributions to a traditional IRA, though how much you can deduct depends on whether you or your spouse is covered by a retirement plan at work and how much you make. This deduction may also be welcome news for procrastinators: You can make contributions that count toward the 2026 tax year until April 15, 2027.
14. 401(k) contributions deduction
The IRS doesn’t tax what you divert directly from your paycheck into a traditional 401(k). That means the amount you contributed to this account in 2026 up to the IRS limit will be reflected as a reduction in your taxable income.
15. Saver’s credit
The saver's credit runs 10% to 50% of up to $2,000 ($4,000 if filing jointly) in contributions to an IRA, a 401(k), a 403(b) or certain other retirement plans. The percentage depends on your filing status and income.
16. Health savings account contributions deduction
Contributions to HSAs are tax-deductible, and the withdrawals are tax-free, too, as long as they were used for qualified medical expenses.
17. Self-employment expenses deduction
There are many valuable self-employment tax write-offs for freelancers, contractors and other self-employed people, including tax breaks for mileage, business insurance premiums, and business meals and travel.
18. Home office deduction
If you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off certain home office deductions for associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.
19. Educator expenses deduction
If you’re a schoolteacher or other eligible educator, you can deduct up to $350 spent on classroom supplies without itemizing. Spouses who are both educators and file jointly can each deduct $350, for a total of $700. New this year, educators who plan to itemize can also write off additional expenses not covered by the deduction above.
20. Senior bonus deduction
Filers who are 65 or older are already eligible for a slightly increased standard deduction. On top of that, people who are 65-plus may qualify for an additional $6,000 "senior bonus deduction" if their income was $75,000 or less ($150,000 or less for joint filers). For those above the limit, the deduction phases out at a rate of six cents per dollar over the threshold.
21. Car loan interest deduction
The OBBBA also introduced the car loan interest deduction, which allows individuals who purchased a new, U.S.-assembled vehicle in 2026 to deduct up to $10,000 in loan interest paid on the car. Single filers with a MAGI of $100,000 or less and joint filers with a MAGI of $200,000 or less are eligible for the maximum deduction, while those above the limit get a reduced deduction.
22. Tip income deduction
Another newer tax break: taxpayers may be able to deduct up to $25,000 worth of certain tips from their income without needing to itemize via the "no tax on tips" deduction. Not all tips qualify, and the deduction is reduced if your MAGI exceeds a certain limit ($150,000 for single filers and $300,000 for joint filers).
23. Overtime pay deduction
In addition to deductions on tipped income, certain filers may also be able to deduct some overtime pay from their 2026 taxable income, even if they do not itemize. The deduction is limited to $12,500 for single filers and $25,000 for joint filers and follows the same income limits as the tipped income deduction.
Credits we said goodbye to in 2026
The EV tax credit was eliminated by OBBBA. Previously, taxpayers who purchased and took delivery of eligible cars were able to claim a credit of up to $7,500 for new EVs or $4,000 for used EVs.
The solar tax credit and the energy-efficient home improvement tax credit, both also eliminated by OBBBA, previously allowed taxpayers to claim a credit for the installation cost of solar energy systems and qualifying energy-efficient home upgrades.
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How do you claim tax deductions?
Generally, there are two ways to claim tax deductions: Take the standard deduction or itemize deductions. You can’t do both.
The standard deduction is a flat-dollar, no-questions-asked reduction in your adjusted gross income. The amount you qualify for depends on your filing status. For example, single filers who claim the standard deduction can subtract $16,100 this upcoming filing season. (You can learn more about standard deduction amounts here.)
Itemized deductions let you cut your taxable income by taking any of the hundreds of available tax deductions you qualify for. The more you can deduct, the less you’ll pay in taxes. There are dozens of itemized deductions available to taxpayers, but importantly, all of them have different rules. Examples of itemized deductions include unreimbursed medical expenses, charitable donations, and mortgage interest.
Which one is better? The standard deduction has gone up significantly in recent years, so you might find that it's the better option for you now, even if you've itemized in the past. On the other hand, there are dozens of itemized deductions available to taxpayers, and all of them have different rules. Your tax software or tax preparer can run your return both ways to see which method produces a lower tax bill.
What are above-the-line deductions?
Contributions to a retirement account or health savings account and student loan interest payments are referred to as "above-the-line" deductions, but it may be easier to think of them as "adjustments" to your income.
These deductions are subtracted from your gross income to determine your adjusted gross income (AGI). Your AGI is important because it is the starting point for calculating your tax bill and also the basis on which you might qualify for many other deductions and credits.
If you qualify for an above-the-line deduction, you can take it regardless of whether you itemize or take the standard deduction.
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What is a tax write-off?
The IRS doesn't use the term "tax write-offs" anywhere in the Internal Revenue Code, but the phrase has gained popularity as a synonym for "tax deduction" over the years. If you hear someone talking about a tax write-off, they're probably referring to certain deductions itemizers can take to lower their taxable income. In contrast, a tax credit is a reduction in your actual tax bill.
» MORE: Tax credits vs. tax deductions
