As 2025 progresses, sweeping tax legislation is advancing through Congress, poised to dramatically reshape the financial and tax landscape in 2026. These changes, aimed at modifying and extending key elements of the 2017 Tax Cuts and Jobs Act (TCJA), carry broad implications for individuals, families, and business owners.
Whether you’re building wealth, managing a business, or planning your estate, understanding and adapting to these evolving tax policies is essential. That’s where a CPA-led advisory firm like Vesta becomes an indispensable partner.
Understanding the Proposed 2026 Tax Changes
Here’s a breakdown of the most impactful provisions currently included in the proposed legislation:
- Extension of Individual Tax Cuts
- The lower income tax rates and increased standard deductions introduced under the TCJA are expected to be extended, providing continued relief for most taxpayers.
- Increase in Estate Tax Exemption
- The federal estate tax exemption may increase to $15 million, a significant boost that creates new opportunities for strategic estate planning, particularly for high-net-worth individuals and business owners focused on legacy preservation.
- SALT Deduction Cap Increased to $40,000
- The state and local tax (SALT) deduction cap is slated to increase dramatically—from $10,000 to $40,000. This change will provide meaningful relief for taxpayers in high-income, high-tax states and will significantly impact year-end planning strategies.
- Removal of Green Energy Tax Credits
- Several green energy tax incentives are being rolled back or eliminated, including credits related to residential solar installations and electric vehicle purchases. While this may not affect a wide segment of taxpayers, those with planned green investments could see major dollar impacts—and may need to accelerate or reconsider their timing.
Expanded Targeted Tax Breaks: What You Should Know
In addition to broader tax rate adjustments, the new bill includes targeted tax relief for specific working groups and industries, signaling a policy shift aimed at boosting middle-class income and business investment:
- No Tax on Tip Income
- Tip-based workers—particularly in hospitality, food service, and personal care—could see their cash and credit card tips become non-taxable, delivering more take-home pay and simplified reporting.
- No Tax on Overtime Wages
- Hourly and shift workers would benefit from tax-free overtime compensation, encouraging workforce flexibility and increasing net earnings potential.
- Restoration of Accelerated Depreciation
- Businesses may again leverage 100% bonus depreciation, allowing immediate deductions for qualifying property—beneficial for capital-intensive sectors like manufacturing, logistics, and construction.
- Immediate Deduction for R&D Expenses
- A major win for innovation-driven businesses: the bill proposes restoring full expensing of research and development (R&D) costs, reversing the 2022 rule requiring amortization over five years.
These changes are not just tax-code tweaks—they could directly impact cash flow, staffing decisions, investment timing, and business growth strategies.
Why Work with a CPA-Led Advisory Firm Like Vesta?
Tax law changes this significant require more than just awareness—they demand proactive, strategic planning. Our CPA-led team helps you navigate the evolving landscape with personalized strategies, timely updates to estate and wealth plans, and informed investment and business decisions. Most importantly, we help ensure compliance while minimizing risk, so you can move forward with clarity and confidence. We are proud to serve markets across Fond du Lac, Sheboygan, Mequon, and Madison.
Take Action Now: Don’t Wait for the Law to Pass
The 2026 tax law changes are coming—and smart financial decisions start with early preparation. Proactively working with a CPA-led advisory firm gives you a head start on adjusting your financial strategy and maximizing the benefits of the coming changes.
Stay Informed with Trusted Resources:
IRS Newsroom – Official IRS updates
Tax Foundation: How 2026 Tax Brackets Would Change if the TCJA Expires
