Every year, I meet individuals, families, and business owners who tell me the same thing:
“I wish I’d started preparing earlier.”
If you’ve ever felt that way around tax season, I understand. The U.S. tax system can be overwhelming even in a “normal” year. But 2026 is shaping up to be anything but normal. As a CPA who’s been through several major tax overhauls—including the 2017 Tax Cuts and Jobs Act (TCJA)—I can say with certainty that 2026 will bring some of the most dramatic tax changes we’ve seen in over a decade. And they’re already set in motion.
The TCJA brought sweeping temporary tax reforms when it was passed in late 2017. While most corporate tax changes were permanent, many individual and small business provisions were only meant to last until the end of 2025. That means unless Congress intervenes with new legislation, those TCJA provisions will automatically expire on January 1, 2026.
That’s why I’m writing this now—not just to prepare you, but to empower you.
Whether you’re a W-2 employee, a small business owner, a retiree, or a family trying to make the most of your credits and deductions, these changes will affect you. The question isn’t if the tax landscape will shift. It’s how prepared you’ll be when it does.
So let’s take a deep dive, starting with the big picture.
Why 2026 Is a Turning Point for Taxpayers
Let me be very clear—2026 is not just “another tax year.” It marks the automatic expiration of more than two dozen major tax provisions that currently benefit individuals, families, and pass-through business owners. These changes are not speculative—they’re already written into the law. Unless Congress acts to extend or replace them, these provisions will sunset.
Let’s unpack what that means, who it affects, and why planning in 2024 and 2025 is absolutely critical.
1.1 The Expiration of the TCJA Individual Tax Cuts
When the TCJA was passed in 2017, it reduced individual income tax rates across the board. It also nearly doubled the standard deduction, eliminated personal exemptions, capped deductions like SALT (state and local taxes), and increased the child tax credit.
However, those benefits were always designed to be temporary for individuals. Here’s what we’re facing:
| Tax Rate Changes (Current vs. Post-TCJA) |
| 10% → 10% (unchanged) |
| 12% → 15% |
| 22% → 25% |
| 24% → 28% |
| 32% → 33% |
| 35% → 35% (unchanged) |
| 37% → 39.6% |
This means that most middle-income earners will pay more in taxes starting in 2026, unless they take steps now to manage their income levels, deductions, and credits.
1.2 The Standard Deduction Will Shrink
Currently (in 2024), the standard deduction is:
- $14,600 for single filers
- $29,200 for married filing jointly
- $21,900 for heads of household
These were increased substantially under the TCJA. But in 2026, we revert to pre-2017 levels, adjusted for inflation, which means the standard deduction will drop by nearly 50%.
At the same time, personal exemptions will return, offering ~$4,700 (estimated for inflation) per person, which can benefit larger families. But if you’re single or child-free, the change will likely raise your taxable income.
1.3 Credits and Deductions Will Be Harder to Qualify For
The Child Tax Credit, currently $2,000 per qualifying child (with a $400 nonrefundable portion), is scheduled to drop to $1,000 per child, and the Other Dependent Credit of $500 will disappear entirely.
Meanwhile, the SALT deduction cap of $10,000 goes away in 2026, which is good news for people in high-tax states—but only if they itemize. The mortgage interest deduction cap will rise back to $1 million in acquisition debt, but again, only matters if you itemize.
These overlapping shifts mean that your entire tax strategy—from withholdings to investments to charitable giving—may need to be reworked. It’s not just about one change. It’s the interplay between them.
1.4 For Small Business Owners: Major Deductions Will Disappear
If you’re a pass-through business (sole proprietor, S-Corp, LLC), you’re likely enjoying the 20% Qualified Business Income deduction (Section 199A). That deduction is also set to expire in 2026, potentially leading to a significant jump in your effective tax rate.
Plus, bonus depreciation will phase down to just 20% by 2026, with full write-offs disappearing. If your business depends on new equipment, vehicles, or real estate improvements, these changes are a big deal.
1.5 Estate and Gift Taxes Are About to Change Drastically
Right now, the federal estate and gift tax exemption is around $13.6 million per person. That’s the amount you can pass on to heirs tax-free. In 2026, it drops by half—to about $7.15 million per person.
For high-net-worth individuals, that could mean millions in potential estate taxes unless planning is done in advance through gifting, trusts, or charitable foundations.
Tax Bracket Shifts and What They Mean for You
As a CPA, one of the first things I look at when working with individuals and families is where they fall in the federal income tax brackets—not just for this year, but two or three years out. Why? Because anticipating where your income will land in 2026 can literally save you thousands in taxes.
And here’s where things start to shift fast.
2.1 What’s Changing with the Tax Brackets in 2026?
When the Tax Cuts and Jobs Act (TCJA) was passed in 2017, it lowered tax rates across nearly every income bracket for individual filers. But those cuts expire after December 31, 2025. That means the lower TCJA tax rates will “snap back” to pre-2018 levels starting in 2026—unless Congress acts to extend or modify them.
Let’s break it down with real numbers.
Here’s what we’re currently working with in 2024 (TCJA rates):
- 10%: Up to $11,600 (single) / $23,200 (married filing jointly)
- 12%: $11,601–$47,150 / $23,201–$94,300
- 22%: $47,151–$100,525 / $94,301–$201,050
- 24%: $100,526–$191,950 / $201,051–$383,900
- 32%: $191,951–$243,725 / $383,901–$487,450
- 35%: $243,726–$609,350 / $487,451–$731,200
- 37%: Over $609,351 / $731,201
Here’s what’s expected in 2026 (Pre-TCJA rates returning, adjusted for inflation):
- 10%: Similar range (remains unchanged)
- 15%: Replaces the 12% bracket
- 25%: Replaces the 22% bracket
- 28%: Replaces the 24% bracket
- 33%: Replaces the 32% bracket
- 35%: Stays
- 39.6%: Replaces 37% bracket
What this means is simple but powerful: many Americans will see a bump in their marginal tax rate of 3% to 7%, even if their income remains the same.
2.2 Why This Matters Even If You Don’t Make “A Lot”
I often hear people say, “I’m not a high-income earner. Why should I care about bracket changes?” My answer is always the same—taxes are about percentages, not just dollar amounts.
If you’re making $70,000 as a single filer, you’re currently in the 12% bracket. In 2026, that jumps to 15%, a 25% increase in your marginal tax rate. For someone making $160,000, you’re moving from a 24% bracket to 28%. That’s a 16.7% increase on every dollar you earn above the lower limit of that bracket.
This means the way you:
- Time your income
- Harvest investment gains
- Make Roth vs. traditional IRA contributions
- Use employer benefits
—could either protect you from rising taxes or expose you to a higher bill.
2.3 Planning Opportunities Before Rates Rise
Now here’s the good news: because we know this is coming, we can start planning now to soften the blow. Here are some of the most effective strategies I’m recommending to my clients between now and the end of 2025:
✅ Roth IRA and Roth 401(k) Conversions
If you believe you’ll be in a higher tax bracket in 2026, converting traditional retirement funds into Roth accounts now lets you pay taxes at today’s lower rates, and then enjoy tax-free growth going forward. Even if you’re already retired, this can be a smart play—especially during lower-income years.
✅ Accelerating Income Into 2024 and 2025
For business owners and self-employed individuals, pulling income forward into the lower-rate years can be an efficient move. That may mean issuing invoices early, accepting project-based work sooner, or deferring deductions to later years when you’ll need them more.
✅ Delaying Deductions
I know this sounds counterintuitive, but trust me—it works. By deferring deductible expenses (like charitable donations or medical payments) into 2026 and beyond, you’ll get a bigger tax benefit when rates are higher. This works especially well if you plan to itemize in 2026 and are currently taking the standard deduction.
✅ Filing Status Optimization
This is particularly relevant for married couples filing jointly. The TCJA temporarily “marriage-penalty proofed” the brackets by doubling most thresholds. But in 2026, that changes. The higher brackets may start to penalize dual-income households again, meaning married couples could find themselves taxed more heavily than two single filers would be.
Planning early for how you’ll file, how income is split, and how deductions are claimed is crucial if you want to avoid a surprise tax bill.
2.4 Bracket Awareness Means Smarter Financial Decisions
Everything from capital gains harvesting, to Social Security benefit timing, to business income strategies, depends on knowing your bracket trajectory. In my own practice, I model out multiple “what-if” scenarios for clients so we’re not just reacting to changes, but actually preparing for them.
Remember—you don’t pay your marginal rate on all your income, but the rate still affects every new dollar you earn or deduct. So when rates jump, the impact can cascade through your entire return.
Personal Exemptions Return & Why You May Need to Start Itemizing Again
If you’ve gotten used to the ease of claiming the standard deduction over the last few years, I want you to pay close attention here—because things are about to change in a big way.
One of the major features of the Tax Cuts and Jobs Act (TCJA) was the elimination of personal exemptions and a nearly doubled standard deduction. For most middle-income households, this simplified filing. You didn’t have to worry about tracking mortgage interest or charitable giving—just take the standard deduction and be done.
But that simplicity came with an expiration date: December 31, 2025.
In 2026, the standard deduction will shrink back to pre-TCJA levels, and personal exemptions will return. On paper, this sounds like a fair trade. In practice? It’s more complicated—and it could mean many of us will need to re-learn the art of itemizing to avoid leaving money on the table.
3.1 What Exactly Is a Personal Exemption and Why Is It Returning?
Before the TCJA, taxpayers could claim a personal exemption for themselves and each dependent. In 2017, that amount was $4,050 per person—so a family of four could reduce their taxable income by over $16,000 just through exemptions.
When TCJA took effect in 2018, it eliminated these exemptions but softened the blow by doubling the standard deduction:
- From ~$6,500 to $13,000 (now indexed up to $14,600 in 2024 for singles)
- From ~$13,000 to $26,000 (now indexed to $29,200 in 2024 for married couples)
In 2026, we’re expecting the standard deduction to drop significantly, while personal exemptions are reintroduced—though the exact exemption amount will be adjusted for inflation (likely in the $5,000–$5,500 range per person).
So, if you’re a single filer, instead of a $14,600 deduction, you may get:
- A standard deduction around $7,000–$8,000
- Plus a $5,000+ exemption for yourself
Total write-off: ~$12,000 to $13,000—less than what you’re currently used to.
For larger families or those with dependents, personal exemptions can be a benefit, but for individuals or couples without children, this change may actually reduce your deductions.
3.2 How This Affects the Way You File
The return of exemptions and reduced standard deductions flips the tax game for many households. Here’s what this could mean for you:
✅ Itemizing May Become More Beneficial Again
In 2024, the standard deduction is so high that 90% of Americans don’t bother to itemize. But in 2026, we’re likely to see that shift. If you have:
- A mortgage (especially with high interest payments)
- Significant charitable donations
- Medical expenses over 7.5% of your AGI
- State and local taxes (up to the SALT cap)
—you may find yourself better off itemizing instead of taking the standard deduction.
That means now is a good time to start tracking these expenses again. In my office, I always remind clients: If you don’t track it, you can’t deduct it.
✅ Families with Children Will See Mixed Outcomes
If you have kids, the return of personal exemptions will help—but don’t assume it’s a windfall. At the same time, the Child Tax Credit will shrink back down (more on that in Section 4). So your overall benefit may be less than what you’ve been used to under the TCJA’s expanded credits.
✅ Retirees and Empty Nesters May Lose Out
One group that could feel the pinch here is retirees and couples with grown children. Without dependents to claim, and without large itemizable expenses like mortgages or business costs, the lower standard deduction could mean a higher tax bill, even if their income hasn’t changed.
3.3 Tax Filing Will Get More Complex—But Also More Personal
When the TCJA passed, it was like putting filing on autopilot. One standard deduction, no exemptions, fewer decisions. That convenience is going away.
Starting in 2026, tax prep will become more nuanced again, and that’s not a bad thing. With more variables back in play, you also have more opportunities to optimize. But only if you know how.
If you haven’t itemized in years, I recommend starting to gather these documents in 2025, so you can compare scenarios before deciding which route saves you more.
And if you’ve relied solely on online filing software, now might be the time to connect with a CPA like myself. Because cookie-cutter tools may miss deductions that a professional can spot—especially as the rules shift.