Tax planning in 2026 is not just about reacting to changes—it’s about understanding how those changes shift the strategy conversation. The One Big Beautiful Bill Act (OBBBA) introduces several updates that directly impact how business owners and high-net-worth families approach estate planning, income tax strategy, and long-term wealth transfer.
While many of these provisions build on prior tax law, the key difference is permanence and expanded flexibility—two factors that open the door for more intentional planning.
Here’s what matters most—and where to focus.
A Higher Estate and Gift Tax Exemption—With More Certainty
One of the most significant changes is the increase in the estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual starting in 2026, with annual inflation adjustments.
Unlike prior legislation, this increase is not scheduled to sunset. That changes the planning mindset.
Instead of rushing to “use it before it’s gone,” the conversation becomes:
- How much exemption should be used now vs. preserved for later?
- What assets are best suited for transfer today?
- How do we structure transfers to maximize long-term tax efficiency?
For business owners, this creates an opportunity to revisit:
- Ownership transition strategies
- Gifting of closely held business interests
- Long-term trust structures
The window isn’t closing—but that doesn’t mean planning should slow down.
SALT Deduction Expansion—With Limitations
The increase in the state and local tax (SALT) deduction cap to $40,000 will provide relief for many higher-income taxpayers, particularly in states like California.
However, this benefit is not unlimited:
- The deduction phases down for higher-income earners
- It is scheduled to revert back to $10,000 in 2030
This creates a temporary planning window.
For some taxpayers, it may make sense to:
- Accelerate deductible payments into higher-benefit years
- Reevaluate entity-level tax elections
- Revisit how income is recognized and distributed
Timing becomes just as important as the deduction itself.
Charitable Giving Rules Are Changing
Charitable planning remains a key strategy—but the rules are evolving.
The OBBBA makes permanent the higher AGI limitation for cash contributions to public charities, while also introducing new thresholds that limit how much of a deduction can be used.
In practical terms, this means:
- Larger gifts may not translate into proportional tax benefits
- Timing and structuring of charitable contributions matter more
- Donor strategies should be revisited, especially for high-income years
For clients who give regularly or plan large gifts, this is a good time to step back and rework the approach—not just continue the same pattern.
New Planning Opportunities: Accounts, Education, and Investments
Several provisions introduce new or expanded planning tools:
- Tax-advantaged savings accounts for minors (often referred to as “Trump Accounts”) create new ways to build long-term wealth early.
- Expanded 529 plan usage allows for broader education-related expenses.
- Qualified Small Business Stock (QSBS) rules become more favorable, particularly for entrepreneurs.
- Opportunity Zone incentives are extended and modified, creating new investment timing considerations.
Individually, these may seem incremental. Together, they expand the number of levers available in a long-term plan.
What This Means for 2026 Planning
The biggest takeaway isn’t any single provision—it’s the shift in approach.
Planning is moving away from:
- Last-minute decisions
- Year-end tax reactions
- One-time strategies
And toward:
- Multi-year planning
- Intentional income and asset timing
- Integrated tax and wealth strategies
For business owners and high-net-worth individuals, the question is no longer just “What can we deduct?”
It’s “How do we structure decisions over time to create better outcomes?”
Where to Start
If you haven’t revisited your strategy recently, now is the time to:
- Reassess your estate plan in light of the higher exemption
- Evaluate income timing opportunities tied to the SALT changes
- Revisit charitable giving strategies
- Identify new planning tools that fit your long-term goals
These changes don’t require immediate action—but they do require a more thoughtful plan.
Final Thoughts
If you’d like to walk through how these 2026 tax changes apply to your situation, the LSL team can help you evaluate your current structure and identify planning opportunities that align with your long-term goals. Contact us today!
