2026 TAX CHANGES: WHAT’S NEW FROM THE IRS & GOVERNMENT

Important updates every Tax Pros client should know.

As we prepare for the new tax year, several major IRS updates, new government programs, tax law changes, and planning opportunities are rolling out. These updates will impact individuals, families, small businesses, and retirees.

Below is your full breakdown of what’s new — including the introduction of the powerful new Trump Accounts, updates to deductions, credits, income limits, and more.

🔵 1. IRS Inflation Adjustments for 2026

The IRS has increased several important tax thresholds for the 2026 tax year (filed in 2027):

Standard Deduction (Increased)

Single: $16,100
Married Filing Jointly: $32,200
Head of Household: $24,150

These changes help reduce taxable income and offset inflation.

Tax Brackets Adjusted Upward

All seven tax brackets (10% → 37%) now have higher income thresholds, helping many taxpayers avoid “bracket creep.”

Other IRS Adjustments

Higher Earned Income Tax Credit (EITC)
Higher Alternative Minimum Tax (AMT) exemption
Estate tax exemption increases
Foreign Earned Income Exclusion increases
Higher contribution limits for FSAs, HSAs, and 401(k)s

🔵 2. New Federal Tax Law: One Big Beautiful Bill Act

Signed in 2025, this law introduced major tax benefits and new savings programs.

The biggest change is the introduction of Trump Accounts — a new tax-advantaged savings account for children.

🔵3. Introducing TRUMP ACCOUNTS

A powerful new government-backed investment account for children.

This is one of the most impactful programs for families in decades.

Who Qualifies?

Any U.S. child born between January 1, 2025 – December 31, 2028.

Must have a Social Security Number.

Government Contribution

Each eligible child receives a $1,000 one-time federal deposit to start the account.

How Much Can Be Contributed?

Family contributions: Up to $5,000 per year
Employer contributions: Up to $2,500 per year (tax-free to the employee)
Contribution limits rise with inflation starting in 2027.

Investment Rules

Funds must be invested in broad, diversified index funds (e.g., S&P 500 index funds).
Growth is tax-deferred.

What Happens at Age 18?

The Trump Account automatically converts into a Traditional IRA for the child.

This gives children a head start on retirement savings that could grow for decades.

Why This Matters

Free $1,000 from the federal government
Long-term tax-deferred investment growth
Employer contributions grow tax-free
Helps build generational wealth
A long-term alternative to 529 plans and custodial accounts

If you or someone in your family is expecting a child between 2025–2028, this is a major opportunity.

🔵 4. New Benefits for Seniors

Taxpayers age 65 or older now qualify for an additional:

$6,000 extra deduction
$12,000 for married couples age 65+

This is in addition to the regular age/blindness deduction already available.

Effective 2025–2028.

🔵 5. SALT Deduction Cap Increase

The State & Local Tax (SALT) deduction cap has increased significantly:

Up to $40,000 per married couple
Up to $20,000 for single taxpayers

This is great news for homeowners and taxpayers in higher-tax areas.

Applies through 2029.

🔵6. New Worker Benefits: Tipped & Overtime Workers

New provisions expected for the 2025 tax year (fully impacting 2026 filing):

No Tax on Tips

Some taxpayers may exclude up to $25,000 of qualifying tips.

No Tax on Overtime

Up to $12,500 of qualifying overtime pay may be excluded.

IRS guidance is being finalized — more details coming soon.

🔵7. IRS Direct File Ending

The IRS will no longer offer the Direct File system for the 2026 tax season.

This means more taxpayers will need professional assistance — and Tax Pros is here to help.

🔵8. Retirement & Business Planning Updates

Higher 401(k) and IRA contribution limits
Expanded HSA and FSA flexibility
Employer Trump Account contributions now allowed
Stable depreciation and corporate tax rules

Businesses should review their benefits plans to maximize deductions.

🔵WHAT CLIENTS SHOULD DO NOW

If you have a newborn (2025–2028):

Ask Tax Pros how to establish your Trump Account and secure your free $1,000.

If you earn tips or overtime:

New deductions may apply — keep good records.

If you’re 65+:

Take advantage of the new $6,000–$12,000 Senior Deduction.

If you’re a homeowner:

The increased SALT deduction may lower your taxes.

If you are an employer:

You can now contribute $2,500 per year tax-free to employees’ Trump Accounts.

If you want to plan ahead:

Schedule a consultation with a Tax Pros advisor.

📞 NEED HELP? WE’RE HERE.

Tax Pros is committed to helping families, individuals, and businesses navigate all these new changes successfully.

For questions or to schedule a consultation:
📞 954-434-7003
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