PKF JND, P.C.'s Tax Planning Guide

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2026 Tax Planning Guide

Introduction

The tax buzz for 2026 is the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. This comprehensive reconciliation package addresses a wide range of policy areas, including tax reform, defense spending, the debt ceiling, social programs, and student loan reform.

On the tax front, the OBBBA affects all taxpayers. The Act makes permanent or extends several individual provisions from the Tax Cuts and Jobs Act (TCJA) that were to expire after 2025, raises the state and local tax (SALT) deduction cap to $40,000, and increases the amount of assets you can transfer free of gift and estate tax. It also introduces a host of new income-tax deductions.

For businesses, OBBBA restores immediate expensing of domestic R&D costs, permanently increases bonus depreciation to 100%, and eases the limitation on interest expense deductions. To offset its costs, the bill phases out or repeals various energy tax credits. Several provisions will affect your 2025 tax filing season as well as your 2026 tax planning.

The OBBBA changes, coupled with the numerous already-in-place inflation adjustments that affect everything from retirement and estate planning to personal and corporate income-tax brackets, make reviewing your investment, estate plan, retirement planning, and business strategies with your tax professional more crucial than ever in 2026. They can help you look at the whole picture and assist you in taking steps to ensure a finally secure future.

We Can Help

Tax regulations are constantly evolving and often complex. Working with your tax and financial professionals to learn how to minimize taxes and leverage your savings to invest in your future has never been more important. We urge you to call us to schedule an appointment. Getting a head start on tax planning can save you money, time, and stress.

The information summarized is current as of November 1; however, circumstances may change that could impact your tax situation. We recommend consulting your tax professional, who can provide guidance tailored to your specific situation.

Personal Tax Planning

OBBBA and Your Personal Taxes

Read through the following checklist of the One Big Beautiful Bill Act (OBBBA) provisions and note any that you think may affect your 2026 tax planning. Further details follow.

Which States' Taxpayers Will Get The Biggest Breaks From OBBBA?

In a recent report, the Tax Foundation estimated the average change in taxes paid relative to prior law across each state and county from 2026 through 2035. Here are the results from the top 15 states.

Income Tax Brackets and Rates

Federal income tax brackets are based on taxable income, which is adjusted gross income minus various deductions. These brackets are adjusted annually for inflation. For 2026, OBBBA changes the way brackets adjust.

Capital Gains Tax

You report capital gains for tax purposes when you sell a capital asset, such as securities or real estate, and realize a profit. Gains on assets held for less than a year are taxed at your ordinary income tax rate.

Other Taxes on Income

Income tax isn't the only tax that affects your spendable income. Be sure to take these taxes into account in your planning as well. Note any changes from 2025.

Deductions and Credits

Tax credits are subtracted directly from taxes owed, while tax deductions lower your taxable income. OBBBA significantly impacts both for 2026.

Itemized Deductions

Itemizing deductions is generally beneficial for those whose deductible expenses exceed the standard deduction amount. This is often the case for homeowners, high-income earners, or individuals with significant medical expenses.

Other Credits

The Child Tax Credit for 2026 is $2,200 per qualifying child. In the future, under OBBBA, the credit amount will be adjusted annually for inflation.

Tax-Advantaged Healthcare Arrangements

HSAs are triple tax-advantaged with tax-deferred contributions, tax-free potential earnings, and tax-free withdrawals for qualified medical expenses. You can roll over any balance you had left at year-end 2025 to 2026.

Education Planning

"Trump Accounts" Introduced in OBBBA, these are government-funded investment accounts designed to help children build wealth from birth. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens and have a Social Security number, are eligible to receive a one-time $1,000 deposit from the U.S. Treasury to start the account.

Plan for Retirement

OBBBA heralds changes that will influence how Americans save for retirement and other long-term goals. Lower income rates. Higher contribution limits.

Estate Planning

From an estate and gift tax perspective, the most significant change OBBBA made is a permanent increase to the estate, gift, and generation-skipping transfer (GST) tax exemption amounts.

OBBBA and Business Taxes

Read through the following checklist of OBBBA provisions for businesses and note any that you think may affect your 2026 business tax planning. Further details follow. OBBBA:

Tax Rates and Business Structures

On the business front, OBBBA provides the most significant benefit to corporations in the manufacturing sector, and less so to those in the service industries. It continues the lower corporate tax rates, which are scheduled to expire at the end of 2025.

Business Deductions and Credits

Small businesses have unique characteristics and needs. Hence, the IRS has some tax provisions that are designed for or may be particularly beneficial to smaller companies.

Rental Real Estate Tax Benefits

Some interests in rental real estate qualify for the 23% pass-through income deduction. These enterprises are generally defined as owning real estate to generate rental income. To claim the deduction, you'll need to meet specific requirements.

More Tax-Managing Considerations

As a business, you have numerous other tax-managing opportunities available to you. See which ones fit your business.

Employee Benefits

Review your employee benefit offerings to ensure they continue to maximize potential tax breaks, while providing benefits that attract and retain qualified employees. OBBBA includes several provisions that directly affect employee benefits, while other changes may have an indirect impact on employer group medical plans.

Accounting Methods

If your average annual gross receipts were $32 million or less in the three previous tax years, you can choose either a cash or accrual method of accounting in 2026.

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