2026 Tax Code: What’s Changing, What’s Likely, and How to Prepare
As we help business owners, executives, and ultra-high-net-worth families navigate complex tax landscapes, our focus for 2026 and beyond is translating fast-moving legislation into concrete planning moves. With the One Big Beautiful Bill Act (OBBBA) signed in July 2025, much of the uncertainty around the 2026 “sunset” has been reshaped, but not eliminated. Here’s what to watch, and what we’re doing for clients now.
Estate, Gift & GST: A Higher, and Now Durable, Exemption
OBBBA resets the federal unified estate, gift, and GST exemption to $15 million per person beginning in 2026, indexed thereafter, functionally locking in a far higher baseline than pre-TCJA levels. For married couples, that’s $30 million of transfer capacity in 2026, before advanced techniques. This reduces urgency around “use-it-or-lose-it” gifting, but strategic lifetime transfers and basis planning remain pivotal, particularly for state-taxable estates and dynasty-trust designs.
Pass-Throughs: Section 199A Made Permanent
For entrepreneurs and family offices with operating businesses, the 20% qualified business income (QBI) deduction under §199A is now permanent. Permanency doesn’t simplify the rules, because SSTB phase-outs, wage/UBIA tests, and aggregation still drive outcomes, but it does enable multi-year entity-choice modeling (S-corp vs. partnership vs. C-corp) with more confidence. We’re refreshing 3–5 year projections to capture the interplay of QBI, payroll optimization, and qualified property strategies.
SALT: A Bigger (But Temporary) Cap
High-tax-state filers get relief: the state and local tax (SALT) deduction cap increases to $40,000 in 2025 (adjusted for status), then ticks up ~1% annually through 2029 before reverting in 2030. This window re-opens certain itemizing strategies, including bunching charitable gifts with donor-advised funds and re-examining PEO/comp structures that affect where income is taxed. We’re also revisiting PTET elections to coordinate federal SALT usage with entity-level workarounds.
Corporations: Cash-Flow Wins Return
On the corporate side, the new law restores or expands immediate expensing for R&D, more favorable interest deductibility, and accelerated investment write-offs, producing significant near-term cash tax savings across capital-intensive and R&D-heavy industries. Expect stronger incentives to on-shore research, re-sequence capital projects into 2025–2026, and revisit stock-based comp timing around corporate AMT. Our capital-stack models now prioritize the reinvest-vs-distribute decision under these revived deductions.
Individuals: Brackets, Deductions, and Credits
OBBBA rebalances several individual provisions that were set to change after 2025, and introduces targeted adjustments, including a temporary additional deduction for seniors, affecting marginal rates and itemizing math for retirees. The broader takeaway: the itemize-vs-standard decision is back in play, and married-filing-joint vs. separate deserves a fresh look in high-SALT states and for Medicare IRMAA management.
Planning Playbook: What We’re Doing Now
1) Multi-Year Tax Maps (2025–2030). We’re re-running pro formas to capture SALT-cap timing, §199A permanence, and estate-tax paths, then anchoring charitable, Roth conversion, and options-exercise windows to those maps.
2) SALT Optimization + Charitable Bunching. With a higher cap for a limited time, we’re aligning property-tax prepayments, DAF contributions, and grant-making cadence to keep clients above the itemizing threshold in optimal years.
3) Entity-Choice and Compensation Reset. §199A permanence shifts the C-corp vs. pass-through calculus; we’re stress-testing under varying profit levels, payroll splits, and UBIA. Executive comp is being retimed to harvest new corporate deductions without tripping corporate AMT frictions.
4) Estate Architecture – Beyond the Exemption. Even with a higher federal shield, state estate taxes, GST strategy, and basis step-up still rule outcomes. We’re layering SLATs, power-to-adjust basis clauses, and swap powers to keep flexibility in a changeable regime.
5) Governance & Documentation. Expect Treasury guidance and technical corrections. We’re building “plan-but-pivot” playbooks, such as board minutes, investment policy updates, and trust distribution standards, so clients can move quickly as rules clarify.
Navigating Taxes in 2026 and Beyond
Bottom line: 2026 won’t be a simple reversion to pre-TCJA. With OBBB-era changes, the winners will be those who sequence deductions, right-size entity structures, and hard-wire flexibility into estate and corporate governance. We’re here to architect that edge.