Tax rules are constantly shifting, and staying compliant while protecting your revenue requires looking ahead. Last year’s One Big Beautiful Bill Act (OBBBA) brought several major tax-related changes, and while some are already active, a fresh wave of provisions will take effect in 2026.
At SD Mayer & Associates, we believe that understanding your finances empowers you to make smarter decisions. You do not have to navigate complex legislation alone. By getting a handle on these upcoming new provisions for 2026 now, you can adjust your tax planning strategy, reduce your liability, and keep more of your hard-earned money.
Here is a plain-language breakdown of the new tax provisions affecting individuals and business owners.
Key 2026 tax changes for individuals
A few significant shifts are coming to individual tax returns. Being proactive can help you maximize your available deductions.
Charitable deductions
If you take the standard deduction, the OBBBA reinstates a helpful tax break. You can claim a deduction for cash donations up to $1,000 (or $2,000 for joint filers). Remember to keep your receipts, credit card statements, or payroll deduction records to back up these claims.
For itemizers, a new floor applies. Your charitable deductions are limited to the amount that exceeds 0.5% of your adjusted gross income (AGI). To work around this, consider “bunching” your donations into alternating years to minimize the impact of that threshold.
Alternative Minimum Tax (AMT) adjustments
More taxpayers might find themselves subject to the AMT in 2026. The exemption thresholds are reverting to lower 2018 levels and will phase out twice as fast. If you suspect you will hit the AMT, talk to your advisor about accelerating income and short-term capital gains into 2026 to take advantage of the lower maximum AMT rate.
Family savings and education limits
Starting July 4, 2026, you can open a new tax-advantaged "Trump Account" for U.S. citizens under 18. You can contribute up to $5,000 annually. For eligible children born between 2025 and 2028, the government will kick in a one-time, tax-free $1,000 contribution. These accounts grow tax-deferred and convert into a traditional IRA when the child turns 18.
Education savings are also getting a boost. The tax-free withdrawal limit for 529 plans used for qualified K-12 expenses (like tuition, books, and fees) will double to $20,000 per year per beneficiary.
Retirement catch-ups and expiring energy credits
High-earning employees need to adjust their retirement strategy. If your Social Security wages exceed $150,000, your 401(k), 403(b), or 457(b) catch-up contributions must be made as after-tax Roth contributions. This could increase your taxable income, so you will want to look for other ways to offset those gains.
Finally, if you plan to upgrade your home with solar panels or energy-efficient windows, act quickly. The federal energy-efficiency credits for homeowners disappear for any property placed in service after December 31, 2025.
What business owners need to know
We love helping businesses optimize their operations and increase profitability. Several 2026 provisions present new opportunities and challenges for corporate tax planning.
Qualified Business Income (QBI) phase-ins
The income ranges over which the Section 199A QBI deduction limitations phase in are expanding. For 2026, the phase-in distance grows to $75,000 for single filers and $150,000 for joint filers. This change paves the way for larger QBI deductions for certain taxpayers.
Tighter excess business loss limits
The threshold for the excess business loss limitation is shrinking. In 2026, deductions for current-year business losses by noncorporate taxpayers cap at $256,000 (or $512,000 for joint filers). Losses beyond that amount must be carried forward. Adjusting your business strategy to avoid generating suspended losses is a smart move.
Paid leave options and clean energy changes
Employers who provide paid family and medical leave will have a new way to claim the employer tax credit. Starting in 2026, you can claim the credit based on the insurance premiums paid for active family and medical leave coverage, rather than just on eligible wages.
If your business is planning commercial clean energy investments, be aware of looming deadlines. The Section 179D deduction for energy-efficient commercial buildings and the Section 30C alternative fuel vehicle refueling property credit will be eliminated for properties that begin construction or are placed in service after June 30, 2026.
Turn tax complexity into financial clarity
Changing tax laws can feel overwhelming, but a clear strategy makes all the difference. You need a partner who thinks outside the spreadsheet and finds innovative ways to optimize your finances.
Reach out to the team at SD Mayer & Associates today. We will help you navigate these 2026 provisions, develop a customized tax plan, and ensure your business stays positioned for long-term success.
SECURITIES AND ADVISORY DISCLOSURE:
Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Fee based planning offered through SDM Advisors, LLC. Third party money management offered through Valmark Advisers, Inc a SEC registered investment advisor. 130 Springside Drive, Suite 300, Akron, Ohio 44333-2431. 1-800-765-5201. SDM Advisors, LLC is a separate entity from Valmark Securities Inc. and Valmark Advisers, Inc. Form CRS Link
DISCLAIMER:
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The services of an appropriate professional should be sought regarding your individual situation.
HYPOTHETICAL DISCLOSURE:
The examples given are hypothetical and for illustrative purposes only.
