For Small Business Owners
1. Leverage 100% Bonus Depreciation: The OBBBA permanently reinstated 100% bonus depreciation, allowing businesses to immediately deduct the full cost of qualifying new and used equipment, vehicles, and software in the year they are put into service.
2. Establish a Retirement Plan: Business contributions to a 401(k), SEP IRA, or SIMPLE IRA are usually tax-deductible. For 2026, the individual 401(k) contribution limit has risen to $24,500.
3. Claim the New Employer Childcare Credit: The maximum credit for employer-provided childcare increases to $500,000 in 2026, or $600,000 for eligible small businesses.
4. Implement an Accountable Plan: By using a formal accountable plan to reimburse employees for business expenses like travel or internet, you can deduct the costs without the reimbursements being taxed as income for the employee.
5. Deduct Self-Employed Health Insurance: If you are self-employed, you can typically deduct 100% of your health, dental, and vision insurance premiums for yourself, your spouse, and dependents under age 27.
6. Utilize the Permanent QBI Deduction: The 20% deduction for Qualified Business Income (QBI) for pass-through entities is now permanent, though high-income phaseouts still apply.
For Individuals and High Earners
7. Maximize the Increased Standard Deduction: For the 2026 tax year, the standard deduction rises to $32,200 for married couples filing jointly and $16,100 for single filers.
8. Claim the Temporary Overtime and Tip Deductions: From 2025 through 2028, workers can deduct up to $25,000 in qualified tip income and a portion of qualified overtime pay.
9. Take Advantage of the New Senior Deduction: If you are 65 or older, you may qualify for an additional deduction of up to $6,000 ($12,000 for joint filers), subject to income phaseouts starting at $75,000 for individuals.
10. Deduct Auto Loan Interest: A new temporary provision allows for a deduction of up to $10,000 on interest paid for a personal vehicle loan, phasing out for single filers with MAGI over $100,000.
11. Fund a Health Savings Account (HSA): HSAs offer a “triple-tax advantage” where contributions are deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. The 2026 family contribution limit is $8,750.
12. Harvest Tax Losses: You can sell investments at a loss to offset realized capital gains, potentially reducing your overall tax liability.
13. Bunch Charitable Contributions: To exceed the 2026 charitable “floor” (only donations above 0.5% of AGI are deductible for itemizers), consider “bunching” multiple years of donations into a single year or a Donor-Advised Fund.
14. Utilize Gift Tax Exclusions: You can give up to $19,000 per recipient tax-free in 2026 to reduce your future taxable estate.
15. Perform a Roth Conversion: Converting a Traditional IRA to a Roth IRA may be beneficial during low-income years to lock in current tax rates and ensure future tax-free growth.
