Tax-first Planning for 2026

Much of the discussion this year around the One Big Beautiful Bill (OBBBA) tax law passed in July 2025 has focused on two familiar themes: permanent extensions of the current personal income tax rates and increase in the federal estate tax exemption.

Those are important changes. But in conversations recently, I’ve found that some of the practical, high return planning opportunities are receiving far less attention than the headline items.

One of the key changes increased the deduction for state and local taxes — the SALT deduction. For years, the deduction had been capped at $10,000, which particularly affected taxpayers in higher-tax states.

The new law raises that deduction to $40,000. For many upper-middle-income households and retirees with significant property taxes and state income taxes, this change could materially reduce taxable income again after years of limitation. It’s scheduled to expire after 2029.

But Congress giveth and taketh-away (and is not at all transparent). One planning nuance that many commentators are missing: the original TCJA SALT cap itself was scheduled to disappear entirely after 2025. Instead, OBBBA replaced that scheduled “full repeal” with a temporary higher cap through 2029, followed by a permanent return to the $10,000 limit. What to do? Explore now if itemizing deductions is the better choice over the standard deduction for this open window.

A new provision receiving attention from retirees is the Senior Deduction. While often pitched as no tax on Social Security benefits (not true), Congress instead created a new deduction specifically for senior taxpayers. The details and income phaseouts matter, but for many retirees this might create meaningful tax relief even if Social Security itself remains taxable under existing rules.

The law also expanded Health Savings Account eligibility in a way that could quietly become valuable over time. Previously, individuals enrolled in Affordable Care Act marketplace plans were generally not eligible to contribute to HSAs. The new rules expand HSA access to many ACA participants. A big opportunity because HSAs remain one of the few accounts in the tax code that potentially receive triple tax benefits: deductible contributions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses.

Business owners also received several significant tax planning opportunities.

The permanent return of 100% bonus depreciation allows businesses to immediately expense qualifying equipment and capital purchases again. Retirement plan contribution opportunities tied to self-employment income remain big levers to reduce current taxes and build long-term assets.

The 20 percent deduction for qualified pass-through business income was made permanent, and the Qualified Small Business Stock capital gain exclusion was increased and indexed to inflation.

If you own a business or have self-employment income, opportunities inside the new law could be substantial. Start planning now.