How the 2026 IRS Changes Could Save Homeowners Thousands in Taxes
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Homeowners could see major tax savings next year thanks to a series of 2026 IRS inflation adjustments that raise deduction thresholds and expand credits tied to homeownership.
According to the IRS, the standard deduction will rise to $32,200 for married couples filing jointly and $16,100 for single filers in 2026. That larger deduction lowers taxable income and could trim hundreds or even thousands off many homeowners' federal tax bills.
Capital gains and home sale exclusions
For homeowners planning to sell, there's another win. The IRS confirmed that the long-standing capital gains exclusion -- up to $500,000 for married couples and $250,000 for single filers -- will now be indexed for inflation starting in 2026. That means you can exclude a larger portion of your home sale profits from taxes if prices in your area have surged in recent years.
This adjustment comes after years of rising home values and could help sellers keep tens of thousands more in profit tax-free.
Energy-efficient home upgrades still pay off
The IRS also maintained and expanded credits for energy-efficient home improvements, including solar installations, heat pumps, and upgraded windows or doors. Many homeowners can still claim up to 30% of qualifying costs through the Residential Clean Energy Credit.
Those savings apply directly to your tax bill rather than just lowering taxable income. If you're planning a remodel or upgrade in 2026, these credits can make sustainable improvements more affordable, and potentially boost your home's resale value.
What homeowners can do now
- Plan ahead: Review your mortgage interest, property taxes, and potential home sale timing for 2026.
- Save for upgrades: Stash project funds in one of the best high-yield savings accounts while you prepare; some are still paying 4.00% or more.
- Invest your savings wisely: If you want to grow funds for future renovations or mortgage paydown, consider contributing to a retirement account or IRA.
The bottom line
The 2026 IRS changes give homeowners several new ways to save: higher standard deductions, inflation-adjusted sale exclusions, and generous energy credits. Taken together, they could mean thousands in savings for anyone who owns a home or plans to sell, refinance, or renovate.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.