What’s Changing for Tax Pros in 2026? How to Stay Ahead of New Laws

Tax professionals hear it constantly that 2026 tax law changes are coming, often framed as a looming TCJA “cliff.” After the One Big Beautiful Bill Act (OBBBA) and IRS Rev. Proc. 2025-32, that framing no longer reflects how the law actually stands.

In 2026, federal tax law will continue the TCJA-era structure, now locked in under the One Big Beautiful Bill Act (OBBBA), with inflation-indexed updates under Rev. Proc. 2025-32. The 37% bracket remains, the standard deduction rises to $32,200 (MFJ), and new above-the-line deductions and SALT cap changes introduce planning complexity.

Many clients still expect a full rollback to pre-2018 rules once 2026 begins. That expectation is increasingly outdated. Most of the TCJA framework remains in place, with OBBBA adding new deductions, revised thresholds, and additional phaseouts. What lies ahead is not a reset but a continuation that introduces enough change to require updated planning assumptions.

This article focuses on what is already set for 2026 and how tax professionals can plan from that baseline. It reviews enacted federal tax changes, including brackets, SALT mechanics, and AMT thresholds, using current statutes and IRS guidance rather than speculation.

Key Takeaways

• 2026 reflects continuity with adjustment, not a wholesale reset. As you plan ahead, it’s clear that OBBBA locks in the TCJA’s seven-bracket rate structure and higher standard deduction, while layering new thresholds, phaseouts, and targeted deductions on top.

• Several TCJA-era provisions are now permanent. You are working with a fixed framework that includes the 37 percent top rate, the elimination of personal exemptions, expanded child credits, and a doubled standard deduction that carries forward indefinitely.

• IRS inflation adjustments set the numerical baseline for 2026. Rev. Proc. 2025-32 delivers the core IRS tax updates 2026 relies on, with bracket thresholds up 11.8 percent over 2025 and the standard deduction rising to $32,200 for married filing jointly, giving you hard numbers for projections.

• SALT relief expands near term but remains temporary. The cap increases to $40,400 in 2026, phases down for married filers with AGI above $600,000, and is scheduled to reset to $10,000 in 2030, which matters most for your high-income, high-SALT clients.

• Planning certainty has improved, but political risk has not disappeared. Your 2026 outlook should be grounded in current-law modeling, while still leaving room for targeted “what-if” scenarios for pass-through owners and clients exposed to future legislative changes.

What Tax Provisions Remain in Effect for 2026?

For a long time, discussions around tax changes after 2025 centered on the idea of a cliff. You still hear that framing in client conversations, but it no longer reflects how the law actually stands.

With the passage of the One Big Beautiful Bill Act (OBBBA) in mid-2025, much of the TCJA framework was locked in. Individual rates from 10 to 37 percent and the larger standard deduction are now permanent, while personal exemptions are gone for good. That shift makes the familiar “everything snaps back to 2017” storyline harder to defend, even if it still comes up with clients.

What stays permanent:

• The seven-bracket rate structure, topping out at 37 percent and indexed each year using chained CPI

• No return of the Pease limitation or miscellaneous itemized deductions, including unreimbursed employee expenses

• The qualified business income (Section 199A) deduction continues, although it begins to phase down after 2029

What remains subject to change

• Excess business loss limits continue to affect non-corporate taxpayers, particularly where income fluctuates or large deductions are timed unevenly

• Certain OBBBA credits and targeted deductions are scheduled to sunset after 2029, which may require revisiting longer-term planning assumptions

• High-income itemizers face caps on the value of deductions, increasing effective marginal rates at the top end even when statutory rates remain unchanged

When clients ask what happens when TCJA expires, the answer is that it does not fully expire.

Planning that still assumes a full reversion is increasingly out of date. The focus now shifts to understanding how a largely permanent framework interacts with a narrower set of limits, phaseouts, and income-based restrictions that ultimately shape real-world outcomes.

What Are the 2026 IRS Inflation Adjustments?

IRS Rev. Proc. 2025-32 provides the numerical foundation you rely on when modeling individual income tax changes 2026. Released in October 2025, it indexes more than 60 provisions using chained CPI, reflecting 3.2 percent inflation over 2025 baselines. These adjustments do not alter policy, but they shape outcomes by shifting brackets, deductions, and AMT thresholds that drive your projections.

In practice, these figures determine how broader tax policy changes 2026 show up on a client’s return. Small movements in threshold amounts can decide whether you keep a client in the 24 percent bracket, push income into the 32 percent range, or trigger AMT once state taxes and timing differences are layered in.

Although the guidance itself is routine, it also frames how you should approach upcoming IRS regulations 2026, especially where inflation-indexed amounts interact with credits, phaseouts, and limitation rules.

Table comparing 2025 and 2026 standard deduction, AMT exemption, and key tax thresholds based on IRS Rev. Proc. 2025-32.

Provision	2025 (MFJ)	2026 (MFJ)	Change
Standard Deduction	$31,200	$32,200	+$1,000
37% Bracket Start	$751,600	$768,700	+$17,100
AMT Exemption	$133,300	$137,000	+$3,700
Child Tax Credit Phaseout	$400,000	$410,000	+$10,000
EITC Max Income	$66,819	$68,931	+3.2%

These are not projections. They are the reference points you use to separate standard and itemized filers, identify AMT exposure, and flag credit phaseouts before entity-level and state tax considerations enter the analysis.

How Will 2026 Tax Law Changes Affect Individuals?

For individual taxpayers, the 2026 rules tend to show up across a small number of areas that interact with one another. The impact is usually clearer once you run side-by-side projections rather than focusing on any single change in isolation.

1. Standard vs itemized deduction

With the standard deduction rising to $32,200 for married filers, many clients remain out of itemization. Where itemizing still makes sense, the new 35 percent cap on the value of deductions above $600,000 of AGI can materially reduce their benefit, effectively increasing the marginal tax cost at higher income levels.

2. AMT exposure

The AMT exemption increases to $137,000 for married filers, with phaseout beginning around $1.2 million. This pulls many taxpayers out of AMT, but state tax addbacks, depreciation timing, and income mix can still push mid-six-figure households back into exposure.

3. New OBBBA deductions

Several new or expanded deductions change outcomes for specific groups:

• Seniors may benefit from a $6,000 increase to the standard deduction, phased in from 2026 through 2029 and subject to AGI limits

• Certain W-2 earners may deduct up to $12,500 of tip or overtime income above the line, provided substantiation requirements are met

• Non-itemizer charitable deductions return at $600 for single filers and $1,200 for married filers

4. Outcomes depend on how the rules interact

One client’s senior deduction may reduce tax by $1,800, while another client loses the benefit entirely once AMT or phaseouts apply. Running regular tax, AMT, and new-deduction scenarios in parallel helps surface these differences before planning decisions are finalized.

What 2026 Tax Law Changes Mean for Business Owners and Pass-Throughs

Business tax changes for 2026 are easy to overlook at first glance, but pass-through owners still feel the effects as individual-level rules flow through entity planning. The impact is less about new provisions and more about how familiar rules interact once projections are updated.

• Section 199A remains in place, for now

The 20 percent qualified business income deduction continues through 2029, with phaseouts beginning around $400,000 for single filers and $500,000 for married filers. For owners approaching seven figures, it is worth flagging exposure early, especially where income timing or entity structure can shift the outcome.

• Depreciation benefits continue to taper

With full expensing scheduled to sunset in 2027, Section 179 elections and cost-segregation timing become more important as bonus depreciation drops to 20 percent in 2026.

• Interest limitations tighten further

The EBITDA threshold rises to roughly $35 million, indexed for inflation, but pass-through owners often feel the effect more directly through OBBBA’s excess business loss rules after 2025. These limits can constrain deductions even when the operating business remains profitable.

• Entity choice questions resurface

S corporation versus pass-through entity tax elections depend heavily on state SALT conformity and owner wage mix. For many clients, running 2026 projections under both structures is no longer optional if you want a clear answer.

For multi-state clients, the analysis becomes more layered. Roughly half of states decouple from OBBBA deductions and bonus depreciation rules, which often forces parallel federal and state modeling. In practice, those differences can swing outcomes by $10,000 or more on a single return.

How Are SALT Deductions Changing in 2026?

SALT deduction changes in 2026 reflect the structure Congress adopted under OBBBA. The relief is real, but it is temporary, and it does not resolve the broader policy questions that continue to surround the deduction. 

For planning purposes, this means you are working with clearer numbers, but a limited time horizon.

• Base cap of $40,400, reflecting a 1 percent increase from the 2025 cap of $40,000

• Phase-down beginning at $600,000 of AGI for married filers and fully eliminated above $900,000

• Statutory reset to $10,000 in 2030 unless Congress intervenes, giving high-tax-state clients a defined four-year planning window

Pass-through entity tax elections become more valuable under the higher federal cap, but the benefit remains uneven across states. Only 40 states and Washington, D.C., currently allow PTET elections, and several impose their own caps or conformity limitations. 

For filers in states such as California, New York, and New Jersey, this means you need to revisit PTET elections annually through 2029 rather than assume the benefit will carry forward unchanged.

When Will Final IRS 2026 Guidance Arrive?

Even with statutes and inflation tables in place, tax law changes 2026 do not arrive all at once. Forms typically land late in the year, often around November, while regulations can lag into the first or second quarter that follows.

New deductions are likely to come with substantiation requirements, which you should expect to see addressed in early-2026 IRS notices. AMT and SALT interactions, along with OBBBA phaseouts, are also likely to prompt proposed regulations by spring, particularly where thresholds and limitations overlap.

Planning too far ahead without final guidance increases rework risk, especially for firms that rely on automated workflows or standardized templates. Clear documentation helps manage that risk. Notes such as “Modeled under Rev. Proc. 2025-32 and OBBBA §110001 as of December 28, 2025” give you a clean reference point if Treasury interpretations or IRS guidance evolve later.

How Should Tax Pros Prepare for 2026 Changes?

1. Start with current law

Before modeling alternatives, load Rev. Proc. 2025-32 and OBBBA figures into your planning tools and run them across a representative slice of your client base. This gives you a grounded baseline before assumptions start creeping in.

2. Segment clients by where exposure actually exists

Not every client is affected the same way. Your attention is best spent on high-SALT households, seniors over age 65, tip and overtime workers, and pass-through owners earning $500,000 or more. Each group responds to different levers and needs a different planning approach.

3. Use stress tests selectively

Political risk has not disappeared, but it does not need to dominate every projection. Running a limited set of alternative scenarios, such as a higher SALT cap, a return to a 39.6 percent top rate, or changes to Section 199A, can help you quantify risk without anchoring planning around worst-case outcomes.

4. Rely on primary sources

Staying current matters more than reacting quickly. Setting alerts on IRS.gov and Congress.gov for 2026-related guidance keeps you focused on developments that actually affect planning, rather than commentary that generates heat without adding clarity.

5. Use research tools to stay efficient

Tools like Bizora can help you verify citations, track new IRS releases, and confirm statutory changes as they happen. That allows you to sequence planning work around fresh authority instead of rebuilding analyses each time headlines shift.

Conclusion

Compared to this time last year, 2026 is easier to plan for. The tax code is not reverting, but it is not frozen either. Planning now starts from a largely stable set of rules, with differences showing up only once the numbers are run.

For tax professionals, the emphasis shifts away from reacting to headlines and toward staying grounded in current law, updating assumptions as guidance arrives, and understanding where limits and phaseouts change outcomes. 

If you’re double-checking statutes, tracking new IRS releases, or pressure-testing assumptions as guidance rolls out, Bizora can act as a research companion throughout the year.

Sign up for a free trial today.

Frequently Asked Questions

What major tax changes are expected in 2026?

Many of the most significant 2026 changes reflect a combination of TCJA-era rules made permanent by the One Big Beautiful Bill Act (OBBBA) and new inflation‑adjusted thresholds published by the IRS for tax year 2026. Under current law, individual tax brackets, the standard deduction, AMT exemptions, key credits, and several new deductions (for tips, overtime, and seniors) will apply in 2026, even if Congress does nothing further.

Does the TCJA fully expire in 2026?

No. OBBBA locks in many of the TCJA’s core structures, including the larger standard deduction, elimination of personal exemptions, and the seven‑bracket rate system topping out at 37 percent. Some other TCJA‑related provisions still have scheduled sunsets or step‑downs after 2025, but the law no longer functions as a simple “everything reverts in 2026” switch.

How will the 2026 tax changes affect individual taxpayers?

For individuals, 2026 planning centers on the permanent 10–37 percent rate structure, higher standard deductions, and expanded AMT and credit thresholds. These amounts are indexed for 2026 under Rev. Proc. 2025-32. New OBBBA deductions such as the additional deduction for seniors and deductions for certain tip, overtime, and auto‑loan interest create fresh opportunities and complexity in modeling after‑tax income.

What should tax professionals be doing now to prepare for 2026?

Firms should build current‑law 2026 scenarios into their planning tools, incorporating OBBBA changes and the IRS’s published 2026 brackets, standard deduction amounts, and AMT exemptions. From there, practitioners can segment clients (e.g., high‑SALT households, seniors, service and hourly workers) and develop playbooks that can be quickly updated if Congress enacts another tax package.

Will SALT deductions change again in 2026?

Yes. Under current law, changes to SALT in 2026 occur within a defined framework: starting in 2025, OBBBA raises the SALT cap to 40,000 dollars and then increases it by 1 percent per year through 2029, so the cap is 40,400 dollars in 2026 under current law. The higher cap is phased down for higher‑income households, and the statute resets the cap to 10,000 dollars in 2030, so long‑term SALT relief beyond that date remains a political question.

How reliable are early predictions about 2026 tax law changes?

Forecasts about additional future deals should still be treated with caution, but projections based on enacted 2026 law (OBBBA plus IRS inflation adjustments) are now relatively reliable inputs for client planning. The real uncertainty lies in whether Congress will pass another package to expand, scale back, or further extend these rules, and how quickly the IRS will interpret any late‑breaking changes in regulations and guidance.