Introduction: The 2026 Tax Season Is Your Opportunity
The 2026 tax season is approaching fast, and with it comes an important question for every taxpayer in California and across the United States: Are you claiming every credit and deduction you qualify for?
The truth is, millions of Americans leave hundreds or even thousands of dollars unclaimed each year simply because they’re unaware of available credits. Whether you’re a salaried employee, self-employed, or a small business owner, knowing how to maximize your refund with the top IRS tax credits and deductions for 2026 can make all the difference.
At ABSE Tax, we specialize in helping Californians navigate the complexities of tax laws, uncover hidden savings, and ensure accurate filings that maximize every dollar of your refund.
Understanding the Difference Between Credits and Deductions
Before diving into the top IRS tax credits and deductions for 2026, it’s crucial to understand the difference:
- Tax Credits directly reduce the amount of tax you owe — dollar-for-dollar.
- Tax Deductions lower your taxable income, which can reduce your total tax liability.
Think of deductions as lowering the amount of income you’re taxed on, while credits directly lower your bill or boost your refund.
Knowing how to balance both is key to maximizing your refund in 2026.
1️. The Child Tax Credit (CTC)
The Child Tax Credit remains one of the most valuable benefits for families. In 2026, qualifying taxpayers may claim up to $2,000 per eligible child under age 17, depending on income level.
Requirements:
- The child must be under 17 at the end of 2026.
- Must be a U.S. citizen or resident with a valid SSN.
- The taxpayer must meet income limits to qualify for the full credit.
Families with lower incomes may also benefit from the Additional Child Tax Credit, which can refund part of the unused portion even if no tax is owed.
ABSE Tip: Parents should ensure dependent information and Social Security Numbers match exactly on their tax return to avoid refund delays.
2️. The Earned Income Tax Credit (EITC)
Designed to support working families, the EITC is a refundable credit that can provide thousands of dollars back depending on your income and number of dependents.
For 2026, the credit amount ranges up to $7,000 for qualifying families with three or more children. Even taxpayers without children can qualify for a smaller credit.
To qualify, you must:
- Have earned income below IRS thresholds.
- Be at least 25 years old and not claimed as a dependent.
- File a joint or individual return (not married filing separately).
ABSE Tip: Many taxpayers who qualify for EITC fail to claim it. Our team reviews every client’s situation to ensure no eligible credit is missed.
3️. The American Opportunity Credit (AOC) and Lifetime Learning Credit (LLC)
Education remains one of the best investments and the IRS rewards it.
American Opportunity Credit (AOC):
- Worth up to $2,500 per student per year.
- Covers tuition, course materials, and fees.
- Applies to the first four years of higher education.
Lifetime Learning Credit (LLC):
- Worth up to $2,000 per tax return.
- No limit on years of eligibility—ideal for graduate students and adults pursuing new certifications.
ABSE Tip: You can only claim one education credit per student per year. We help you determine which provides the higher refund.
4️. Energy-Efficient Home & Vehicle Tax Credits
Sustainability also pays. The Energy Efficient Home Improvement Credit and Clean Vehicle Credit continue into 2026, rewarding homeowners and drivers who go green.
Home Improvement Credit:
- Up to $1,200 per year for improvements like windows, doors, insulation, or HVAC systems.
Clean Vehicle Credit:
- Up to $7,500 for new EVs and $4,000 for used EVs that meet federal requirements.
ABSE Tip: Always retain manufacturer certification and purchase invoices for energy-efficient products, documentation matters for claiming these credits.
5️. The Saver’s Credit (Retirement Savings Contribution Credit)
If you contribute to a 401(k), IRA, or similar retirement account, you could receive an additional tax credit of up to $1,000 per person (or $2,000 for joint filers).
This credit rewards lower and middle-income taxpayers who prioritize saving for retirement.
ABSE Tip: Contributing before the April 15, 2026 filing deadline can still count toward your 2025 tax year, a smart last-minute way to reduce your tax liability and maximize your refund.
6️. Medical and Health Care Deductions
For 2026, you can deduct qualified medical expenses that exceed 7.5% of your adjusted gross income (AGI).
This includes:
- Out-of-pocket costs for prescriptions, surgeries, and medical travel.
- Health insurance premiums (in some cases).
- Dental and vision expenses.
ABSE Tip: Maintain a year-long expense tracker or spreadsheet to record medical receipts, organization is key when claiming this deduction.
7️. Small Business & Self-Employed Deductions
If you’re self-employed or operate a small business in California, you’re eligible for a wide range of IRS tax deductions 2026 that can dramatically lower your taxable income.
Top deductions include:
- Home office expenses.
- Internet and phone usage for business.
- Mileage and vehicle depreciation.
- Business meals and travel (within limits).
- Professional fees and advertising costs.
ABSE Tip: Combining small-business bookkeeping with professional tax preparation ensures every expense is documented properly and survives an audit.
8️. Mortgage Interest and Property Tax Deductions
Homeowners continue to enjoy valuable tax deductions in 2026:
- Mortgage Interest Deduction on loans up to $750,000.
- Property Tax Deduction (state and local taxes capped at $10,000 total).
These deductions remain vital for Californians with high housing costs.
ABSE Tip: Keep annual mortgage interest statements (Form 1098) and property tax receipts ready for documentation.
9️. Charitable Contributions
If you make donations to qualified nonprofits or religious organizations, you can deduct up to 60% of your AGI in charitable giving.
ABSE Tip: Always request receipts or donation letters from charities. Non-cash items such as clothing or furniture must be valued accurately to be deductible.
10️. Plan Early to Avoid IRS Refund Delays
Even if you qualify for multiple credits, filing errors and paper returns can lead to IRS refund delays. With limited IRS staffing, paper filings take longer to process.
How to Avoid Delays:
- File electronically with IRS e-file.
- Opt for direct deposit refunds.
- Double-check SSNs and dependent information.
- Work with a trusted tax professional.
At ABSE Tax, we combine secure electronic filing, accurate documentation, and compliance expertise to ensure faster, stress-free refunds.
Final Call to Action: Let ABSE Tax Maximize Your 2026 Refund
The tax code is filled with opportunities, if you know where to look. By taking advantage of the top IRS tax credits and deductions for 2026, Californians can save significantly, invest smarter, and prepare confidently for the future.
At ABSE Tax, our mission is simple: to help you maximize your refund while staying fully compliant. Our experts specialize in everything from tax filing and planning to audit defense, bookkeeping, payroll, and back-taxes resolution.
Don’t leave money on the table this tax season. Let our professionals uncover every deduction, credit, and refund opportunity you deserve.
Contact ABSE Tax Today:
Mailing Address:
18000 Pioneer Blvd, Suite 203, Artesia, CA 90701
Tel and Fax:
Tel: (562) 403-1177
Fax: (562) 403-1199
Email: info@absetax.com
ABSE Tax, your trusted California partner for smarter tax savings, faster refunds, and stronger financial growth in 2026.
