2026 Tax Tips

For Individuals & Families

1. The Return of “Itemizing” (Standard Deduction Halves)
The TCJA nearly doubled the standard deduction, causing many to stop itemizing. In 2026, the standard deduction is scheduled to be cut roughly in half (inflation-adjusted).

Tip: Start tracking charitable donations, medical expenses, and mortgage interest again. You may likely return to itemizing in 2026 to lower your taxable income.

2. Tax Brackets Bounce Back (Expect Higher Rates)
Current rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) are set to revert to 2017 levels (10%, 15%, 25%, 28%, 33%, 35%, 39.6%).

Tip: Consider accelerating income into 2025 (Roth conversions, exercising options, taking bonuses) to lock in the current lower rates before they rise in 2026.

3. The SALT Cap Disappears (Good News for High-Tax States)
The $10,000 cap on State and Local Tax (SALT) deductions expires.

Tip: If you live in a high-tax state (NY, CA, NJ), defer paying large state tax bills (if possible without penalty) to 2026 when they may be fully deductible again.

4. Mortgage Interest Deduction Expands
The limit on deductible mortgage debt reverts from $750,000 back to $1 million.

Tip: Homeowners with mortgages between $750k and $1M who missed out on deductions recently may regain them in 2026.

5. Miscellaneous Itemized Deductions Return
The “2% floor” deductions (unreimbursed employee expenses, investment fees, tax prep fees) come back.

Tip: Keep detailed receipts for union dues, uniforms, and investment advisory fees, as these may once again be deductible if they exceed 2% of your AGI.

For Businesses & Owners

1. The End of the 20% Pass-Through Deduction (QBI)
The Section 199A Qualified Business Income (QBI) deduction creates a 20% tax break for S-Corps, partnerships, and sole proprietors. This expires completely in 2026.

Tip: Evaluate your entity structure. With the QBI deduction gone but the Corporate Tax Rate staying flat at 21% (it does not sunset), C-Corp status might become more attractive for some businesses compared to pass-through status.

2. Bonus Depreciation Hits 0%
100% bonus depreciation has been phasing out (60% in 2024, 40% in 2025). By 2026, it is scheduled to be gone entirely, leaving standard MACRS depreciation.

Tip: Purchase and place heavy equipment, vehicles, or machinery into service before the end of 2025 to capture the remaining partial bonus depreciation.

3. Entertainment & Meals
Strict rules on entertainment (non-deductible) remain, but verify if any temporary expansions for restaurant meals have fully sunsetted.

Tip: Continue to strictly separate “client entertainment” (0% deductible) from “business meals” (50% deductible).

For High-Net-Worth (Estate & Gift)

1. The Estate Tax Exemption “Cliff”
The lifetime estate and gift tax exemption (approx. $13.6M per person in 2024) will be cut in half to roughly $7 million (inflation-adjusted) in 2026.

Tip: “Use it or Lose it.” Wealthy individuals should consult estate attorneys immediately. Gifting assets now (in 2025) locks in the higher exemption. If you wait until 2026, that extra ~$6-7 million of tax-free space vanishes.