Tax Planning Considerations for 2026

What the One Big Beautiful Bill Act Means for the Year Ahead

The start of a new year is often a moment to step back and take stock of what’s changed and ensure your financial plan still reflects what matters most. While goals and priorities often evolve gradually, the rules that shape how you plan can shift more quickly.

As we look ahead to 2026, the One Big Beautiful Bill Act (the OBBBA) has largely faded from headlines, but its practical effects are just beginning to show up in planning decisions. While many of the law’s provisions took effect in 2025, others begin to apply this year, making this a natural moment to pause and reassess.

Signed into law in July 2025, the OBBBA marked the most significant shift in federal tax policy since 2017. Rather than reinventing the tax system, it brought clarity and permanence to many existing rules while introducing several meaningful new opportunities that begin this year.

Below, we highlight key OBBBA changes that take effect in 2026 and one important update under the SECURE 2.0 Act.

Itemized deductions: still available, but with new guardrails

If you typically itemize deductions, this is one area worth a closer look as 2026 begins.

Charitable giving looks a little different

Beginning in 2026, charitable deductions for those who itemize will only apply to gifts that exceed 0.5% of adjusted gross income (AGI). For example, if your AGI is $1 million and you donate $15,000 to a qualified charity, only $10,000 would be deductible. The first 0.5% ($5,000) doesn’t count. It’s a small threshold on paper, but it changes the math in high-earning years.

For families who give regularly, especially those who give generously, this may be a reason to rethink how and when you make gifts, particularly if your income tends to fluctuate from year to year, such as after a bonus or equity-compensation event. In some cases, approaching charitable giving with a multi-year perspective—using strategies like bunching contributions and using a donor-advised fund (DAF)—may help preserve flexibility and tax efficiency.

A new cap on the benefit of itemized deductions

Starting in 2026, high earners in the top tax bracket will see a modest reduction in the value of itemized deductions. Under this new limitation, for taxpayers in the 37% federal tax bracket, each dollar of itemized deductions will yield only a $0.35 tax benefit instead of the full $0.37 typically applied at that bracket. As such, this change doesn’t eliminate deductions, but it slightly reduces their tax impact.

This isn’t a reason to abandon itemized deductions or thoughtful planning. It is, however, a reason to be more intentional about timing and structure—and to revisit these decisions with your wealth manager to ensure your approach still aligns with your broader goals.

The SALT deduction continues to enjoy a temporary boost

For those living in high-tax states, the state and local tax (SALT) deduction has been a recurring friction point for years.

Under the OBBBA:

• The annual SALT cap increases from $10,000 to $40,000 through 2029
• The expanded cap gradually phases out at higher income levels
• In 2030, the cap is scheduled to revert back to $10,000

Keep in mind, state conformity may vary, so your specific deductions could differ based on where you live.

This expanded window creates planning opportunities, particularly for families with uneven income or business owners with pass-through entities.

For eligible owners in states that offer it, the pass-through entity tax (PTET) workaround remains intact and may still allow state taxes to be deducted at the entity level, outside the individual SALT cap. For background, see IRS Notice 2020-75, which confirmed the federal treatment of entity-level state taxes.

Trump Accounts

New “Trump Accounts” will create another way to save for children, with tax-deferred growth. These accounts, for children under 18, allow contributions up to $5,000 per year per child from parents, relatives, employers or certain nonprofit organizations.

Each account will be seeded with a one-time $1,000 federal contribution for children born in the U.S. between 2025 and 2028. Funds must be invested in a diversified stock index fund, such as one tracking the S&P 500. Distributions may occur at age 18 or later, and earnings are taxable upon withdrawal.

We expect Trump Accounts to be available in summer 2026.

Estate planning: higher exemptions, more breathing room

One of the most closely watched provisions of the OBBBA was the estate and gift tax exemption.

Beginning in 2026:

• The lifetime exemption increases to $15 million per person ($30 million for couples)
• The higher exemption is now permanent and will continue to adjust for inflation

For many families, this reduces pressure to make large gifts on an accelerated timeline. For others, particularly those with taxable estates, it creates space to be more strategic and thoughtful about long-term wealth transfer. These higher limits also open the door to revisit estate strategies with greater flexibility and purpose.

Qualified Opportunity Zone (QOZ) investments

The OBBBA made the Qualified Opportunity Zone (QOZ) program permanent, expanding its scope and benefits for long-term investors. Starting July 1, 2026, state governors can designate new QOZs effective Jan. 1, 2027.

The QOZ designation will be effective for 10 years, and new designations will be made on each 10-year anniversary following Jan. 1, 2027. Enhanced tax benefits for QOZ investments will be available after 2026.

Tax credits

The Energy Efficient Home Credit and Alternative Fuel Refueling Property Credit will expire June 30, 2026. This follows the repeal of several consumer clean-energy incentives, including credits for electric vehicles and certain home energy improvements, in 2025.

In addition to the OBBBA changes, 2026 also brings an important retirement planning update under the SECURE 2.0 Act— one that affects how certain catch-up contributions must be made.

Catch-up contributions to certain retirement plans

Beginning in 2026, a new rule under the SECURE 2.0 Act will change how some retirement “catch-up” contributions are made.

If you’re age 50 or older and earned more than $145,000 from your employer in the prior year (an amount indexed for inflation), your catch-up contributions to a workplace retirement plan—such as a 401(k), 403(b), or 457—must be made as Roth (after-tax) contributions rather than pre-tax.

This means you’ll pay taxes on those contributions now, but qualified withdrawals in retirement can be tax-free.

If your employer’s plan does not currently allow Roth contributions, you may be unable to make catch-up contributions until the plan is updated.

Catch-up contributions to these types of retirement plans are limited to $8,000 for those 50+ in 2026, except for individuals ages 60 to 63, who can make up to $11,250 of catch-up contributions.

How 2026 tax law changes may affect your planning decisions

For most individuals and families, the effects of these tax law changes won’t come all at once. They’ll appear gradually—in the small decisions that shape your financial life year after year.

As 2026 gets underway, it’s a good time to lift your eyes from the technical details of new tax rules and focus on the bigger picture—how your tax, investment and estate decisions support the life you want to live and the legacy you hope to create. It’s also a time to ensure your strategies still reflect your family’s values while preserving flexibility for the future.

If you have questions about how these changes fit into your financial life, talk with us. Aspiriant wealth managers are here to help you think it through—clearly, calmly and with the long view in mind.