Big Tax Changes Coming in 2026: What Every American Needs to Know

Major tax laws in the United States are scheduled to change in 2026, affecting almost every taxpayer — from employees and small business owners to families and retirees.

Here’s a simple breakdown of the biggest tax changes coming in 2026, and how they may impact your money.

⭐ 1. Expiration of the 2017 Tax Cuts and Jobs Act (TCJA)

The biggest change:
Many tax cuts from 2017 will expire at the end of 2025.

In 2026:

✔ Tax brackets will shift upward

Some people will move into higher tax brackets even without earning more.

✔ Standard deduction will drop

This means more income becomes taxable.

✔ Personal exemptions may return

This slightly offsets the lower deduction.

⭐ 2. Higher Income Tax Rates in 2026

Expected changes:

12% → 15%
22% → 25%
24% → 28%
32% → 33%
35% → 35%
37% → 39.6%

Many households will pay more taxes than before unless Congress extends the current law.

⭐ 3. Child Tax Credit Will Decrease

Currently (after expansions):

Up to $2,000 per child

In 2026:

Lower credit
Stricter eligibility
Less refundability

Families will feel this change the most.

⭐ 4. SALT Deduction May Return to Old Rules

SALT = State and Local Taxes
The current $10,000 cap may expire.

If lifted:

✔ Homeowners in high-tax states benefit
✔ More deductions available

If Congress keeps the cap → no change.

⭐ 5. Mortgage Interest Deduction Changes

The deduction may return to pre-2017 levels:

From $750,000 → $1,000,000 mortgage limit

Good news for high-income homeowners.

⭐ 6. Estate Tax Threshold Will Drop (Big Change)

Current exemption:
$12.92 million per person

In 2026 expected to drop to:
$5–6 million per person

This affects wealthy families, business owners, and property investors.

⭐ 7. Small Business Tax Changes

Pass-through deductions (the 20% QBI deduction for LLCs and freelancers) may:

Shrink
Change
Or expire completely

This is one of the biggest unknowns for entrepreneurs.

⭐ 8. Retirement Savings Benefits May Change

401(k) and IRA contribution limits are increasing due to inflation, but special tax breaks introduced in recent years may be reviewed.

Key points:

✔ Saver’s credit may change
✔ Roth conversion rules may shift
✔ Catch-up contributions may increase

⭐ 9. How These Tax Changes Will Impact You

✔ Middle-income families

Will likely pay more taxes due to:

Higher brackets
Lower child tax credit
Reduced standard deduction

✔ High-income earners

Affected by:

Higher top tax rate
Lower estate tax exemption

✔ Homeowners

Mixed impact depending on SALT and mortgage deduction rules.

✔ Small business owners

Uncertain changes to the QBI deduction.

⭐ 10. How to Prepare for 2026

✔ Meet with a tax professional in 2025

The best year to plan.

✔ Maximize deductions now

Before the rules change.

✔ Increase retirement savings

Reduce taxable income.

✔ Track expenses more carefully

Especially if you're self-employed.

✔ Plan for potential higher taxes

Budgeting becomes more important.

⭐ Conclusion

2026 will bring some of the biggest tax changes in nearly a decade.
Higher rates, lower deductions, and shifting rules mean many Americans will owe more unless they plan ahead.

Understanding these changes now can help you save money, reduce stress, and stay prepared.

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"Major tax changes are coming in 2026. Learn how income taxes, deductions, credits, small business rules, and estate taxes will shift — and how to prepare."

Tuesday, December 9, 2025