In the aftermath of the One Big Beautiful Bill Act (OBBBA), taxpayers and business owners face an unprecedented opportunity to enhance their financial outcomes. With permanent extensions of TCJA provisions, new incentives, and expanded limits, proactive planning for 2026 can yield expanded deductions for state and local taxes and long-term growth. This comprehensive guide will walk you through key strategies, ensuring you capitalize on every available break.

Understanding the One Big Beautiful Bill Act

Enacted in 2025, the OBBBA solidifies many 2017 TCJA rules and introduces fresh incentives designed to foster investment and certainty. Individuals, corporations, real estate investors, and high-net-worth taxpayers benefit from permanent extension of the Qualified Business Income Deduction and inflation-indexed thresholds. By avoiding major sunsets, the act allows for strategic decisions with a clear long-term horizon.

From increased SALT caps to enhanced depreciation, this legislation reshapes year-end and new-year planning. Understanding each provision’s mechanics—and how they interact—forms the foundation of a robust tax optimization plan for 2026 and beyond.

Key Deductions and Caps for 2026

The OBBBA dramatically alters deduction limits, requiring a fresh look at itemizing versus standard deductions. Taxpayers with high state and local taxes can now benefit from a SALT cap that quadruples prior limits, while inflation adjustments lift standard deductions to new heights.

Additional breaks include a tip income deduction capped at $25,000 and overtime compensation relief up to $25,000 for joint filers. Business meals may regain partial deductibility, while charitable gifts now face a 0.5% AGI floor—demanding precise timing for maximum impact.

Accelerating Depreciation and Expensing

OBBBA restores 100% bonus depreciation for qualifying property placed in service after January 19, 2025, and raises Section 179 limits to $2.5 million with a $4 million phase-out. Combined with the revival of full R&E expensing under Section 174A, businesses can write off major capital investments immediately, unlocking immediate tax relief.

Real estate investors can leverage cost segregation studies to segregate shorter-life assets and accelerate cost segregation and bonus depreciation in 2026. Energy-efficient buildings may qualify for Section 179D deductions, further reducing taxable income for green construction.

• Accelerate depreciation via cost segregation and bonus depreciation strategies.
• Leverage Section 179 expensing for machinery, equipment, and improvements.
• Claim Section 174A full R&D expensing for domestic research activities.
• Utilize Section 179D energy efficiency deductions for real estate.
• Review business interest limitations under Section 163(j) for additional relief.
• Plan capital purchases by year-end to maximize 2025 and 2026 benefits.

Maximizing Savings and Retirement Contributions

With higher limits for 401(k), IRA, and HSA contributions, individuals have a golden opportunity to increase retirement savings and lower taxable income simultaneously. Employers can also capitalize on SECURE 2.0 credits for plan establishment and Roth catch-up contributions.

Consider adopting a new plan early in 2026 to secure full-year benefits and evaluate design options like SEP-to-defined-benefit switches for self-employed taxpayers. For states with automatic programs, such as New York’s Secure Choice, ensure mandatory participation deadlines are met.

• Harvest investment tax losses to offset gains.
• Bundle charitable giving in high-income years.
• Minimize estimated payments and invest the difference.
• maximize contributions to retirement accounts before year-end deadlines.
• Reassess itemized deductions versus standard deduction gains.

Estate Planning for High-Net-Worth Taxpayers

The OBBBA locks in a permanent $15 million individual ($30 million joint) estate and gift tax exemption, inflation-indexed, providing unrivaled planning certainty. Meanwhile, AMT exemptions remain at historically high levels but phase out faster, affecting executives with large compensation packages.

Business owners can benefit from expanded QSBS capital gains exclusions, while proper trust design and gifting strategies preserve wealth across generations. With volatility in other jurisdictions, locking in these federal exemptions is more critical than ever.

• Review estate plans to align with permanent high exemptions.
• Structure gifts using annual exclusion and lifetime exemptions.
• Explore QSBS holdings for maximum capital gains exclusion.

Putting It All Together

By weaving together these provisions, taxpayers can craft a holistic tax plan that balances near-term relief with long-term growth. From defer capital gains through Opportunity Zone investments to aggressive depreciation and strategic retirement savings, every element of OBBBA offers a lever for optimization.

Collaborate closely with your accountants, financial advisors, and legal counsel to model personalized scenarios, document compliance, and implement elections before deadlines. Whether you’re an individual, real estate investor, or C-suite executive, the proactive strategies outlined here can transform uncertainty into opportunity.

Embrace the OBBBA’s powerful toolkit, plan deliberately, and optimize your financial returns for 2026 and years to come.