As tax laws evolve, it’s more important than ever for financial professionals to stay current on the latest regulations and understand how to apply them to real-world client situations. 

In this continuing education webinar, eMoney experts Michelle Riiska and Zach Gates walk though the most impactful 2026 tax law updates, including a deep dive into how the One Big Beautiful Bill Act (OBBBA) reshapes planning opportunities, and how planners can model those changes using eMoney tax planning tools. For historical context, see our 2025 Tax Webinar Recap.

Looking for current guidance? Read our 2026 Tax Webinar Recap:

2026 Tax Legislation Updates: What You Need to Know

Several major components of the Tax Cuts and Jobs Act (TCJA) continue into 2026, but with an important distinction: OBBBA made many of these provisions permanent, though future legislation could always change them.

Key updates include:

• Marginal tax brackets remain aligned with TCJA levels and were made permanent by OBBBA
• Capital gains brackets continue as before, with only inflation-based adjustments
• Standard deductions stay at the higher TCJA levels and are now permanent
• Personal exemptions remain permanently eliminated
• Estate tax exclusion rises to $15 million per person for 2026, indexed for inflation
• Annual gift exclusion increases to $19,000
• AMT exemption is $90,100, with phase-out beginning at $500,000 (MFJ is $140,200 with phase-out beginning at $1,000,000)
• Child tax credit is extended and increased to $2,200 per qualifying child, with phase-outs beginning at $200,000 (individual) and $400,000 (joint)

A recurring reminder throughout the session: “Permanent” tax law simply means permanent until the next bill is passed, making ongoing review essential.

SALT Deduction and Itemized Deduction Changes

One of the most notable updates for high-income and high-tax-state clients is the expansion of the SALT deduction cap:

• The SALT cap increases to $40,400 in 2026
• The cap grows by 1% annually through 2029, before reverting to $10,000
• A phase-out begins at $500,000 of modified AGI, reducing the deduction by $0.30 per dollar over the threshold
• Even for the highest earners, the SALT deduction cannot drop below $10,000

Itemized deduction phase-outs were also made permanent, with a precise calculation that affects top-bracket earners. For those in the highest tax bracket, deductions are reduced by 2/37 of the smaller of total itemized deductions or taxable income above the 37% threshold.

New charitable deduction rules add another layer of complexity, including:

• A new 0.5% AGI floor for charitable deductions
• Expanded carry-forward provisions
• Greater importance around timing charitable gifts

Meanwhile, non-itemizers can now deduct up to $1,000 per person for cash contributions to public charities—making accurate modeling increasingly nuanced and reinforcing the value of tax planning technology.

New Non-Itemized Deductions Expanding Planning Opportunities

Several new above‑the‑line deductions introduce planning opportunities across income levels, though these expire after 2028:

• Senior deduction: $6,000 per taxpayer over age 65 (expires after 2028)
• Car loan interest deduction: up to $10,000 per taxpayer (expires after 2028)
• Overtime pay deduction: up to $12,500
• Tips deduction: up to $25,000

Each deduction comes with specific eligibility and phase-out rules, but collectively create new flexibility for tax planning. Planners may find these deductions open doors for Roth conversion strategies, even for clients who previously had limited tax‑planning flexibility.

Trump Accounts and Retirement Savings Updates

In 2026, Trump accounts are available as a retirement-style investment vehicle designed for children. The accounts:

• Are available for any child under 18, the $1,000 contribution is available for children born between Jan 1, 2025 and Dec 31, 2028
• Allow up to $5,000 in annual contributions, which are not deductible
• Are open to employer contributions of up to half of the annual amount, excluded from employee income

Contribution Limits and Retirement Account Changes for 2026

Annual inflation adjustments continue to affect retirement savings:

• 401(k) and similar plans: $24,500 contribution limit
• Standard catch-up (50+): $8,000
• Enhanced catch-up (ages 60–63): $11,250
• IRAs: $7,500 limit with $1,100 catch-up (first increase since 2006)
• SIMPLE IRAs: $16,500 standard, $18,100 enhanced
• HSAs: $4,400 individual / $8,750 family, plus $1,000 catch-up

The session also highlighted early discussion of a potential new 401(k)-style program for workers without employer plans, though no formal proposal has been released.

State Tax Updates and Planning Considerations

While the webinar focuses on federal law, state taxes remain a critical planning variable. State tax rules are built into eMoney and updated annually, though often later in the year as states finalize forms and guidance.

Planners are encouraged to:

• Visit relevant state websites for up-to-date information
• Watch for state bracket changes impacting 2026 planning
• Validate assumptions for high impact states
• Incorporate state taxes into projections to avoid misleading outcomes

Updates on Student Loans and Lost Retirement Accounts

Two additional reminders stood out:

• Student loan forgiveness is once again taxable after the expiration of the American Rescue Plan, so planners should revisit older plans that modeled forgiveness as tax-free income.
• The Retirement Savings Lost and Found database can help clients locate forgotten accounts, an increasingly practical planning conversation

Key Planning Takeaways for Planners

• 2026 is a major deduction year, with meaningful changes for both itemizers and nonitemizers
• Additional deductions create new Roth conversion opportunities across income levels
• Charitable planning requires more intentional timing and coordination
• Estate planning is simplified by higher exemptions—but still demands regular review
• Accurate education and modeling are essential as campaign concepts become enforceable tax law

Applying It All in One Place: Tax Planning Workflow Highlights

Staying current on tax law is only half the battle; the real advantage comes from knowing how to apply the changes with precision. With evolving legislation and increasing complexity, professionals who pair deep tax knowledge with robust planning technology are better positioned to deliver meaningful, tax-efficient advice.

View the full webinar to see a detailed walkthrough of eMoney tax planning capabilities, which includes:

• Leveraging advanced facts and Form 1040 tax mode for maximum accuracy
• Capturing tax basis, carryforwards, charitable data, and state selection correctly
• Using reports like the Income Tax Report, Tax Events Ledger, and Decision Center to identify opportunities and explain outcomes clearly to clients

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.