Tax Planning Strategies for 2026
Entity choice, estimated taxes, retirement, and the 2026 brackets after the 2025 legislation.
Planning is what you do before December 31. Resolution is what you do after the CP504. The 2025 tax legislation (widely referred to as the One Big Beautiful Bill) locked in larger standard deductions, a higher SALT cap through 2029, and a much larger estate exclusion. That does not mean “do nothing.” It means the moves shifted.
Individuals
- With a $16,100 / $32,200 standard deduction, itemizing is a California and high-mortgage problem more than a national one — unless charitable bunching or the $40,400 SALT cap changes the math.
- Harvest capital losses against gains; wash-sale rules still apply.
- Roth conversions in lower-income years still work. Watch IRMAA and the additional Medicare tax.
- 529, HSA, and 401(k) / SEP / Solo 401(k) remain the cleanest legal deferrals for W-2 and 1099 earners.
Business owners
- S corporation reasonable-compensation vs. QBI (Section 199A) is still the planning tension. Payroll tax savings that create a late 941 is not a win.
- Accountable plans, home office, and vehicle substantiation are exam bait. Mileage logs beat a reconstructed Google timeline.
- Estimated payments: the safe harbor is still 100% of last year’s tax (110% if AGI was over $150,000). Underpayment penalties are cheaper to avoid than to abate.
Estates
The basic exclusion is $15 million per person for 2026 decedents. That takes most families out of federal estate tax. It does not take them out of California probate, step-up basis planning, or state estate taxes if they own property elsewhere. Do not redo a trust based on a blog post — have counsel read the document.
General information for tax year 2026, not legal or tax advice. IRS programs depend on your filing history, assets, and collection statute. Talk with a representative before you send the IRS money or financials.