Get Ahead of the Curve: Preparing for the Major Tax Changes of 2026

As the year 2026 approaches, taxpayers and financial experts alike are bracing themselves for significant changes to the tax code. According to a recent article by Forbes, these changes are expected to have far-reaching implications for individuals, businesses, and the economy as a whole. In this article, we'll break down the major tax changes coming in 2026 and provide guidance on how to prepare.

What's Changing in 2026?

The tax changes set to take effect in 2026 are a result of the expiration of certain provisions of the Tax Cuts and Jobs Act (TCJA). Some of the key changes include: Increased Tax Rates: The TCJA's individual tax rate cuts are set to expire, which means that tax rates will increase for many taxpayers. Reduced Standard Deductions: The standard deduction, which was nearly doubled by the TCJA, will return to its pre-2018 level. Changes to Itemized Deductions: The state and local tax (SALT) deduction, which was capped at $10,000 by the TCJA, will remain in place, but other itemized deductions may be subject to changes. New Limits on Retirement Contributions: The TCJA's increased limits on retirement contributions, such as those to 401(k) and IRA accounts, may be reduced or eliminated.

How Will These Changes Affect You?

The impact of these tax changes will vary depending on your individual circumstances. However, here are a few scenarios to consider: High-Income Earners: Those with higher incomes may face increased tax rates, which could result in a larger tax bill. Small Business Owners: The changes to pass-through taxation and the qualified business income (QBI) deduction may affect the tax liability of small business owners. Retirees: The changes to retirement contributions and the potential reduction in the standard deduction may impact retirees' tax situations.

Preparing for the Changes

While the full extent of the tax changes is still unclear, there are steps you can take to prepare: Consult a Tax Professional: A tax expert can help you understand how the changes will affect your specific situation and provide guidance on how to minimize your tax liability. Review Your Financial Plan: Take a close look at your budget, investments, and retirement savings to ensure you're on track to meet your financial goals. Consider Tax-Loss Harvesting: If you have investments that have declined in value, you may be able to offset gains from other investments by selling the losing investments and using the losses to reduce your tax bill. The major tax changes coming in 2026 are likely to have significant implications for taxpayers. By understanding the changes and taking proactive steps to prepare, you can minimize your tax liability and ensure you're well-positioned for the future. Stay informed, consult with a tax professional, and review your financial plan to get ahead of the curve and make the most of the new tax landscape.

For more information on the tax changes and how to prepare, visit Forbes and consult with a qualified tax expert.