Silly Money
10 Big Tax Changes in 2026 (And What You Should Do About Them)
The IRS announced so many big tax changes this year.
The One Big Beautiful Bill passed on July 4th last year created a ton of brand new opportunities. Some were delayed. Some just went live this month.
And if you don't know about them, you're going to leave money on the table.
I've spent the last few weeks digging through all the changes that matter.
Here are the 10 most important things to be aware of in 2026, along with what you should actually do about each one.
Fair warning: #7 could be catastrophic if you gamble.
Let’s dive in.
1. Increased Estate Tax Exemption: $15M Single / $30M Married
The temporary increase to the estate tax exemption has been made permanent. And they added even more on top.
You now have $15 million per spouse (or $30 million for a couple) that can be passed on tax-free to heirs on death.
Here's what makes this especially powerful: starting in 2027, this amount will be indexed to inflation. That means the exemption will automatically increase every single year going forward.
For context, the old exemption was set to sunset back to around $6 million at the end of 2025. The One Big Beautiful Bill not only made the higher amount permanent, but increased it even further.
What this could mean for you
If your net worth is under $15 million (or $30 million married), federal estate taxes are now very low priority for your planning. You have substantially more room to breathe.
But here's the thing most people miss: even if you're under the federal threshold, 18 states and jurisdictions still have their own estate or inheritance taxes with much lower thresholds. New York, for instance, has an exemption of only around $6.9 million. So don't ignore state planning.
For those with larger estates, this is a huge opportunity. You can now gift significantly more during your lifetime without using up your exemption. If you've been holding off on setting up trusts or gifting shares to family members because you were worried about the exemption sunsetting, that pressure is now gone.
I've written about how trusts can be used to multiply tax benefits like QSBS, and these same structures now have even more runway for estate planning purposes. You can read my deep dive on QSBS to see how these strategies work together.
2. Itemized Deductions Are Back in Play for More People
If you make under $500,000, you can now deduct state and local taxes up to $40,400 if you itemize.
This is a massive change from the old $10,000 cap.
The math just changed for millions of Americans. Previously, the standard deduction was almost always the better choice because the SALT cap killed the benefit of itemizing for most people in high-tax states.
Now? If you live in California, New York, New Jersey, or any other high-tax state and you make under $500K, you should seriously reconsider whether itemizing makes sense for you.
But watch out for the phaseout!
Above $500,000 in income, the deduction limit starts to decrease. For every dollar you earn above $500K, your SALT cap drops by 30 cents. By the time you hit $600,000 in income, you're right back to the old $10,000 cap.
This creates an interesting planning opportunity. If you're a business owner hovering around that $500K threshold, there may be ways to shift income between years or use structures like non-grantor trusts to stay under the limit.
For high earners above $600K:
The SALT cap workaround still works. If you have a business, you can use the Pass-Through Entity Tax (PTET) to effectively bypass the SALT cap entirely.
I wrote a detailed breakdown of how the PTET workaround works. It can save business owners in high-tax states $25,000 or more every single year. If you're earning 7-figures, this could put an additional $30,000+ in your pocket annually.
3. Charitable Contributions Are Less Valuable for the Wealthiest
This one is a bit of a mixed bag.
Good news for standard deduction filers: If you don't itemize, you can now deduct $1,000 single / $2,000 married for charitable contributions above the line. This is a brand new deduction that didn't exist before.
Not-so-good news for itemizers: There's now a floor of 0.5% of your adjusted gross income before your charitable deductions kick in. That means if you earn $1 million, your first $5,000 of charitable giving is not deductible.
Even worse news for top earners: If you're in the 37% bracket, your itemized charitable deductions are now capped at 35 cents on the dollar instead of 37 cents.
This is a relatively small difference, but it does change the calculus on large charitable contributions.
What you could do:
If you were planning a large charitable gift, it would have been more valuable to complete it in 2025 before these limitations kicked in. But don't let that stop you from giving in 2026.
For those making significant charitable contributions, I'd recommend looking into a Donor-Advised Fund (DAF). You can bunch multiple years of giving into a single year, take the deduction upfront, and then distribute to charities over time.
Even better: consider donating appreciated stock directly to charity. You avoid capital gains taxes entirely AND get the full deduction for the current market value. I wrote a complete breakdown of tax-efficient charitable giving strategies that covers DAFs, appreciated stock donations, and more advanced structures like CRUTs.
4. Opportunity Zones Are in a Dead Zone Until 2027
The new tax bill extended Opportunity Zones indefinitely. That's great news.
But here's the catch: the new and improved OZ rules don't actually start until 2027.
Starting in 2027, you'll be able to defer capital gains on a rolling 5-year basis by investing in an Opportunity Zone. And if you hold for 10 years, you owe zero taxes on any gains inside the OZ investment.
Until then? The old rules still apply, and they're less attractive. The original OZ benefits included a 10% step-up in basis after 5 years and a 15% step-up after 7 years. Those are gone for new investments made before 2027.
What this could mean for you:
If you have significant capital gains and were considering an OZ investment, you might want to wait until 2027 when the new rules kick in.
That said, I'm a big believer in not letting tax planning drive investment decisions. I invested in an Opportunity Zone fund a few years ago as a play for tax alpha. We deployed the fund in a few residential properties in Bushwick, NYC.
The returns have been underwhelming so far.
The lesson: don't chase OZ investments purely for the tax benefits. The investment itself needs to make sense.
5. Trump Accounts Finally Launch
This is one I'm genuinely excited about.
Trump Accounts (officially called "Money Accounts for Growth and Advancement" or MAGA accounts in the bill) will be available for all kids under 18 starting in July 2026.
Here's how they work:
Parents can contribute $5,000 per year (after-tax) per child
Employers can contribute $2,500 per year (pre-tax) per child
Kids born between 2025-2028 get a free $1,000 from the government
But here's the feature that makes these absolutely incredible: at age 18, your kid can convert the entire account to a Roth IRA.
I'll admit at first I overlooked just how powerful these accounts are. I was focusing on the wrong thing, which was the free $1,000 from the government.
The real magic is the Roth IRA conversion.
If you contribute $5,000 per year for 18 years and the money grows at 10% annually, you'd have around $233,000 at the age of 18. Convert that to a Roth IRA, and assuming no further contributions ever, it compounds to over $12 million by retirement age. All tax-free.
I wrote a complete breakdown of how to use Trump Accounts to make your kids tax-free millionaires.
For business owners: You have a unique opportunity here. Each parent can have their business make contributions, potentially making the entire $5,000 contribution tax-free with $2,500 coming from each side as an employment perk.
These accounts launch in July 2026. If you have kids under 18, get ready to take advantage of this immediately.
6. HSAs Expanded
HSA contribution limits are now up to $4,400 (individual) and $8,750 (family).
That's nice, but it's not the headline.
The big news is that more people now have access to an HSA even without a High Deductible Health Plan (HDHP).
All ACA marketplace Bronze and catastrophic plans are now HSA-eligible. This opens up HSAs to millions more Americans who previously couldn't access them.
Most people don't realize that the Health Savings Account is the most tax-advantaged account in America.
It's the only account type with three separate tax benefits:
Contributions are tax-deductible (or pre-tax if through payroll)
Growth inside the account is tax-free
Withdrawals for qualified medical expenses are tax-free
And here's the hack most people don't know about: as long as you store the receipts from paying healthcare expenses out of pocket, you can reimburse yourself at any point in the future. Even decades later.
If you can afford it, here's how to maximize the power of an HSA:
Pay healthcare expenses out of pocket with a credit card (keeping the credit card points)
Store the receipts for all these healthcare expenses somewhere (I use HSATracker.ai)
Invest your HSA dollars and let them grow and compound for a very long time
At age 65, you can withdraw the contributions for any reason at all
If you've been avoiding HSAs because you couldn't get an HDHP through your employer, check if your Bronze or catastrophic plan now qualifies.
7. Gambling Losses Now Only 90% Deductible
This one is brutal. And it catches a lot of people by surprise.
Starting January 1, 2026, you can only deduct 90% of your gambling losses against your winnings.
Think about what this means: You could gamble $100,000, break even with an equal amount of winnings and losses, and still owe taxes on $10,000 of "phantom income."
If you're in the top bracket, that's almost $4,000 in taxes on money you never actually made.
This can be catastrophic if you gamble large amounts. Professional poker players and high-rollers are going to get absolutely hammered by this change.
Here's how the math could play out:
Let's say you win $250,000 from poker tournaments in 2026, but you also lose $250,000. You break even. In the past, you'd owe nothing on gambling income.
Now? You can only deduct $225,000 (90% of $250,000). That means you'll owe tax on $25,000 of gambling income even though you haven't earned a dime.
At a 37% federal rate plus state taxes, you could be looking at a $10,000+ tax bill on money you never actually received.
The interesting loophole:
Prediction markets like Polymarket and Kalshi are NOT subject to this rule. Since they're regulated by the CFTC as derivatives rather than gambling, the 90% cap doesn't apply.
That's a meaningful distinction if you're into betting on elections, sports outcomes, or other prediction market events.
What you could do:
If you gamble with any regularity, meticulous record-keeping is now more important than ever. You need to be able to document every win and loss to maximize your deduction.
There's also bipartisan legislation (the FAIR BET Act) trying to repeal this provision, so keep an eye on whether that passes. But for now, plan as if the 90% cap is here to stay.
8. More Dollars Into Retirement Accounts
The contribution limits have increased across the board:
Traditional or Roth IRA: $7,500 per year
401k (employee contribution): $24,500 per year
Solo 401k or SEP IRA: A whopping $72,000 per year
And yes, the mega backdoor Roth loophole still works.
If you earn over $168,000 single or $2525,000 married, you technically can't directly contribute to a Roth IRA. But using the mega backdoor Roth strategy, you can funnel up to $72,000+ a year into your Roth IRA through your 401k.
I love my Roth IRA. Even though I pay taxes on the dollars I contribute, I don't need to pay taxes on any growth or when I finally get the money in retirement. And I have access to my contributions at any time.
Inspired by Peter Thiel, I've been trying to see if I can compound a large balance in my Roth IRA.
I wrote a detailed step-by-step guide to the Mega Backdoor Roth if you want to learn exactly how to implement this.
For business owners:
If you have any self-employment income at all, you can set up your own Solo 401k with this feature. I personally have about $50K in self-employment income this year, and I'm contributing almost all of it to my Roth IRA via my Solo 401k.
The Solo 401k is the most powerful retirement account in America if you know how to use it. You can read my Ultimate Guide to the Solo 401k to learn more.
9. 100% Bonus Depreciation Is Permanent
You can now front-load depreciation on lots of big purchases and get a much bigger Year 1 tax deduction.
Anything with a 15-year or less depreciation schedule can be claimed fully upfront.
This includes things like:
Equipment and machinery
Qualified improvement property (QIP) for commercial buildings
Certain interior improvements
Computers and technology
Vehicles used for business (with some limits)
Before this change, bonus depreciation was scheduled to phase out gradually. It was 100% in 2022, dropped to 80% in 2023, 60% in 2024, and was headed toward 0%.
Now? It's locked in at 100% permanently.
What this means for business owners:
If you're making big equipment purchases or doing improvements to commercial property, the tax benefits are fully restored.
Let's say you buy $500,000 of equipment for your business. Instead of depreciating it over 5-7 years, you can deduct the entire amount in Year 1. At a 37% bracket, that's $185,000 in immediate tax savings.
This is particularly powerful when combined with strategies like cost segregation for real estate, where you can accelerate depreciation on components of a building that would otherwise be depreciated over 27.5 or 39 years.
10. It's a Better Time Than Ever to Be a Business Owner
The tax code continues to favor business owners and investors over employees. Here are the highlights:
QSBS tax exemption now $15M!
The capital gain exclusion for Qualified Small Business Stock has increased from $10 million to $15 million per shareholder. Even better, starting in 2027, it will be indexed to inflation.
And here's the really big news: the holding period has been shortened from 5 years to 3 years for stock issued after July 4, 2025.
This is absolutely massive for startup founders, employees, and investors. I've written extensively about QSBS because it's the single most important tax break in tech startups. You can read my original QSBS deep dive and my updated post on QSBS in 2025.
With smart planning, you can multiply the QSBS limit many times over using trusts and gifting strategies. Some founders have multiplied it to $50M, $100M, or even more. I used these strategies myself when I sold my startup, setting up a CRUT and a Dynasty Trust to multiply my QSBS exemption three times.
QBI deduction made permanent, with a new minimum
The 20% deduction for qualified business income from pass-through entities is now permanent. This was scheduled to sunset at the end of 2025, and that uncertainty is now gone.
Pass-through entity tax loophole still works
The PTET workaround I mentioned earlier continues to be a powerful way for business owners to bypass the SALT cap. This wasn't touched by the new legislation.
R&D expenses fully deductible again
Starting in 2022, businesses were required to capitalize and amortize R&D expenses over 5 years instead of deducting them immediately. This was brutal for tech companies.
The new bill reverses this for domestic R&D. You can once again fully deduct R&D expenses in the year they're incurred.
What Should You Actually Do About All This?
Here's my action list:
Review your SALT situation. If you're under $500K income and in a high-tax state, run the numbers on itemizing vs. standard deduction. The math may have changed.
If you're a business owner making over $600K, implement PTET if you haven't already. It's a no-brainer.
Max out your retirement accounts. The limits went up. Use them. If you have self-employment income, set up a Solo 401k if you haven't.
If you have kids under 18, get ready to open Trump Accounts in July 2026. This is one of the best wealth-building opportunities for your children.
If you gamble, keep meticulous records and understand that breaking even now costs you money in taxes.
If you're a startup founder, employee, or investor, understand QSBS inside and out. The $15M limit with a 3-year holding period is incredibly generous.
If you're making big equipment purchases, accelerate them to take advantage of 100% bonus depreciation.
The tax code rewards those who understand it. I hope this breakdown helps you keep more of what you earn.
Reply to this email and let me know what you think of this issue. And if there are any other tax topics you want me to cover, I'm all ears.
See you next week,
— Ankur
P.S. I’m teaching a free workshop tomorrow called How to Pay Less in Taxes in 2026 where we’ll cover these changes in more detail! Even if you can’t make it, it helps to register for free as I’ll be sending a replay shortly after wrapping up for anyone on that list :)
Author Disclosure: I'm writing this as myself, not as some investment adviser or broker-dealer. I’m not a tax professional, this is all purely educational or my personal thoughts - not investment, legal, tax, or professional advice. Financial decisions involve risk, including losing money. Taxes are complex. Please do your own research or talk to a licensed pro before acting on anything you read here.
