Tax Changes Expected for 2026: What Taxpayers Need to Know As the sun sets on 2025, many landmark provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire, triggering significant tax increases for millions of Americans beginning in 2026. Without congressional action to extend or modify these rules, taxpayers should prepare…
⏱ 2 min read
Tax Changes Expected for 2026: What Taxpayers Need to Know
As the sun sets on 2025, many landmark provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire, triggering significant tax increases for millions of Americans beginning in 2026. Without congressional action to extend or modify these rules, taxpayers should prepare for higher rates, smaller deductions, and reduced credits. Early planning will be essential to minimize the financial impact.
Individual Income Tax Rates Reverting Higher
The seven-bracket structure introduced by the TCJA will revert to the pre-2018 brackets. The top marginal rate will climb from 37% to 39.6%, while the 22% bracket will jump to 25%. Most income levels will see an effective tax increase of 2–4 percentage points.
Standard Deduction and Key Credits Shrinking
The standard deduction is projected to drop roughly in half — from approximately $15,000 for singles and $30,000 for married couples filing jointly back to pre-TCJA levels. The Child Tax Credit will be cut from $2,000 per qualifying child to $1,000, and the earned income tax credit and other family-focused benefits will also become less generous.
Expiration of Popular Business and Investment Breaks
The 20% Qualified Business Income (QBI) deduction for pass-through entities will disappear.
The $10,000 cap on the state and local tax (SALT) deduction will sunset, allowing higher deductions in high-tax states.
Estate and gift tax exemptions are expected to be halved from current levels of roughly $13.6 million per person, subjecting more family wealth to federal transfer taxes.
Planning Opportunities Now
Financial advisors recommend accelerating income into 2025 while rates remain lower, maximizing contributions to retirement accounts, and evaluating whether to itemize or bunch deductions before the standard deduction shrinks. Business owners should consider entity-structure reviews before the QBI deduction vanishes.
The 2026 tax changes represent one of the largest automatic tax increases in modern history. Staying informed and working with a qualified CPA can help individuals and businesses develop proactive strategies to navigate the new landscape effectively. Congress may still intervene, but prudent planning assumes the scheduled changes will take effect.
Tax Changes Expected for 2026
May 2, 2026 · Blog
⏱ 2 min read
Tax Changes Expected for 2026: What Taxpayers Need to Know
As the sun sets on 2025, many landmark provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire, triggering significant tax increases for millions of Americans beginning in 2026. Without congressional action to extend or modify these rules, taxpayers should prepare for higher rates, smaller deductions, and reduced credits. Early planning will be essential to minimize the financial impact.
Individual Income Tax Rates Reverting Higher
The seven-bracket structure introduced by the TCJA will revert to the pre-2018 brackets. The top marginal rate will climb from 37% to 39.6%, while the 22% bracket will jump to 25%. Most income levels will see an effective tax increase of 2–4 percentage points.
Standard Deduction and Key Credits Shrinking
The standard deduction is projected to drop roughly in half — from approximately $15,000 for singles and $30,000 for married couples filing jointly back to pre-TCJA levels. The Child Tax Credit will be cut from $2,000 per qualifying child to $1,000, and the earned income tax credit and other family-focused benefits will also become less generous.
Expiration of Popular Business and Investment Breaks
The 20% Qualified Business Income (QBI) deduction for pass-through entities will disappear.
The $10,000 cap on the state and local tax (SALT) deduction will sunset, allowing higher deductions in high-tax states.
Estate and gift tax exemptions are expected to be halved from current levels of roughly $13.6 million per person, subjecting more family wealth to federal transfer taxes.
Planning Opportunities Now
Financial advisors recommend accelerating income into 2025 while rates remain lower, maximizing contributions to retirement accounts, and evaluating whether to itemize or bunch deductions before the standard deduction shrinks. Business owners should consider entity-structure reviews before the QBI deduction vanishes.
The 2026 tax changes represent one of the largest automatic tax increases in modern history. Staying informed and working with a qualified CPA can help individuals and businesses develop proactive strategies to navigate the new landscape effectively. Congress may still intervene, but prudent planning assumes the scheduled changes will take effect.
Disclaimer
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