A clear, no-stress breakdown of what the latest tax updates mean for you and your money
Happy New Year! As you’re packing away the holiday decorations and making (or breaking) your resolutions, there’s one more thing to add to your “fresh start” list: getting up to speed on the 2026 tax law changes. Don’t worry, this isn’t as scary as it sounds. In fact, with a little help, you might even find some reasons to celebrate!
Let’s break down what’s new for small business owners and individuals, and see how the new tax brackets could affect your wallet in 2026.
1. 2026: The Year of Tax Law Glow-Ups
If tax law had a “makeover” show, 2026 would be the big reveal episode. Thanks to a series of legislative updates, many of the temporary perks from the 2017 Tax Cuts and Jobs Act (TCJA) are now here to stay, and some are even better than before. Think of it as your tax return’s chance to shine, with a few new features and a lot more sparkle.
2. Meet the New Tax Brackets: Bigger, Bolder, and (Mostly) Better
Tax brackets are like the rungs on a ladder, each step up means a little more tax, but also a little more income. For 2026, the IRS has raised the rungs to keep up with inflation, so you might find yourself with a little more room to climb before hitting the next rate.
For Married Filing Jointly:
- 10%: $0 – $24,800
- 12%: $24,801 – $100,800
- 22%: $100,801 – $211,400
- 24%: $211,401 – $403,550
- 32%: $403,551 – $512,450
- 35%: $512,451 – $768,700
- 37%: Over $768,700
For Single Filers:
- 10%: $0 – $12,400
- 12%: $12,401 – $50,400
- 22%: $50,401 – $105,700
- 24%: $105,701 – $201,775
- 32%: $201,776 – $256,225
- 35%: $256,226 – $640,600
- 37%: Over $640,600
Heads of household and married filing separately have their own ladders, but the idea is the same: more room before you hit the top rung. And for most folks, the “marriage penalty” is mostly gone—unless you’re climbing all the way to the top.
3. Small Business Owners: Your Tax Toolbox Just Got an Upgrade
Running a business is a lot like juggling flaming torches, exciting, a little risky, and definitely not for the faint of heart. The 2026 tax changes are here to help you keep more of your hard-earned cash (and maybe avoid a few singed eyebrows).
QBI Deduction: The Gift That Keeps on Giving
- The Qualified Business Income (QBI) deduction is now permanent. That’s right—up to 20% off your qualified business income, every year, no coupon code required.
- The phase-in range is now $150,000 for joint filers and $75,000 for singles, with a $400 minimum deduction for those with at least $1,000 in qualifying income. If you’re actively running your business, you’re in the club.
Expensing: Go Big or Go Home
- You can now expense up to $2,560,000 in equipment and other eligible property, with the phase-out starting at $4,090,000. That’s a lot of laptops, trucks, or espresso machines.
1099 Reporting: Less Paperwork, More Play
- The threshold for sending out 1099-NEC and 1099-MISC forms jumps from $600 to $2,000. That means fewer forms to fill out and more time to focus on your business (or your golf game).
Child Care Credits: Help for the Helpers
- The employer-provided child care credit is juiced up to 40% (or 50% for small businesses), with higher limits. If you’re helping your employees with child care, Uncle Sam is helping you.
Other Goodies
- More favorable business interest rules, retroactive full expensing for research, and inflation-adjusted thresholds for “small business” status. It’s like a tax law goody bag.
4. Individuals: More Deductions, More Credits, More Reasons to Smile
Tax season doesn’t have to be a drag. With these 2026 changes, you might just find a few extra reasons to look forward to your refund.
Standard Deduction: Bigger and Better
- The standard deduction is now $32,200 for joint filers, $24,150 for heads of household, and $16,100 for singles. That’s more money you can keep before the IRS takes a bite.
Senior Deduction: Age Has Its Privileges
- If you’re 65 or older, you get a $6,000 senior deduction (with some income limits). Finally, a birthday present from the IRS!
SALT Deduction: A Little More Flavor
- The state and local tax (SALT) deduction cap is up to $40,400, with phaseouts for high earners. It’s not unlimited, but it’s a lot more generous than before.
AMT and Itemized Deductions: Less Ouch
- The Alternative Minimum Tax (AMT) exemption is higher, and the dreaded Pease limitation is gone—replaced by a much gentler reduction for high earners.
Credits and More
- The Child Tax Credit is $2,200 per child, the dependent care credit is more generous, and the QBI deduction is available to individuals with qualifying business income.
Mortgage and Charity: Some Fine Print
- The $750,000 mortgage interest cap is here to stay, and high-income taxpayers have new rules for charitable deductions. But for most, the basics remain friendly.
5. Pro Tips for a Winning 2026 Tax Season
- Check your business structure: The new QBI rules might make a different entity type more attractive.
- Max out deductions and credits: Don’t leave money on the table—review what’s new and claim what’s yours.
- Watch those income thresholds: Many benefits phase out at higher incomes, so a little planning can go a long way.
- Enjoy less paperwork: With higher 1099 thresholds, you can spend less time on forms and more time on what matters.
- Stay tuned for state quirks: Not all states play by the same rules, so double-check your local laws.
6. Wrapping Up: Make 2026 Your Best Tax Year Yet
The 2026 tax law changes are like a fresh coat of paint for your finances—brighter, bolder, and (for most) a little more fun. Whether you’re running a business, managing a household, or just trying to keep up with the latest IRS news, these updates are designed to help you keep more of what you earn.
So, raise a glass (or a calculator) to a new year and a new tax code. And remember: a little planning now can mean a lot more to celebrate next April!
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