Tax laws are changing again, and we want to make sure you are fully prepared. With the recent tax updates taking effect in 2026, you will see a mix of permanent rate cuts, higher deductions, and new ways to save money.
We know that tax legislation can feel overwhelming. To help you plan ahead, we have summarized the most important updates and exactly how they might impact you, your family, and your business.
Individual and Family Tax Changes
The new law focuses heavily on keeping more money in your pocket through increased standard deductions and new credits.
- Permanent Tax Rates: The lower individual tax rates you have enjoyed over the past few years are now permanent.
- Higher Standard Deductions: The standard deduction is going up and staying up. For 2026, singles can deduct $16,100, and married couples filing jointly can deduct $32,200.
- Expanded Child Tax Credit: The Child Tax Credit permanently increases to $2,200 per qualifying child. It will also adjust for inflation in the future.
- New Senior Deduction: If you are 65 or older, you can take advantage of a new $6,000 deduction. A married couple can deduct $12,000 if both spouses qualify.
- Tips and Overtime Relief: Between 2025 and 2028, you can claim temporary deductions for qualified tips and overtime pay.
Updates to Itemized Deductions
If you typically itemize your deductions, you need to be aware of a few structural changes to the tax code.
- State and Local Taxes (SALT): The SALT deduction cap temporarily jumps to $40,000 from 2025 through 2029. After that, it will permanently revert to $10,000.
- Mortgage Interest: The cap on the mortgage interest deduction is permanently set at $750,000 of acquisition debt.
Introducing “Trump Accounts” for Minors
Starting in 2026, the law creates a new type of savings vehicle designed to build long-term wealth for children. These special IRAs are for minors under the age of 18. You can contribute up to $5,000 per year to these accounts, and employers can even chip in up to $2,500 annually.
Key Benefits for Business Owners
If you own a business, the new tax updates offer excellent opportunities to invest and grow.
- 100% Bonus Depreciation: The law makes full, immediate expensing of qualified business property permanent. You no longer have to worry about the phase-down schedule.
- R&D Expensing: You can immediately deduct all domestic research and experimental expenses, overriding the old rule that forced you to spread those costs out over five years.
Important IRS Administrative Change
The IRS is officially moving away from paper. They are currently phasing out paper checks for individual tax refunds. To get your money quickly and securely, you will need to set up direct deposit by providing your bank account information when we file your return.
We Are Here to Help
These updates create new opportunities, but they also require careful planning. Please reach out to a Saville team member. We look forward to helping you navigate these new rules with confidence.