Income Taxes 2026

Okay, all joking aside, it’s time to deliver some dismal news: some people could see their income taxes skyrocket by up to 25% in 2026. That’s because certain provisions of the 2017 Tax Cuts and Job Act (TCJA) are set to expire by the end of 2025. Whether they are financially sound or already stretched thin, nearly all business owners would be affected by this brutal blow.

Imagine the domino effect on your business operations: slashed margins, tightened budgets, and a scramble to reassess financial strategies. Knowing all this, you can mold the future, instead of trying to foresee it. Use this advanced warning to adjust your financial strategies and arm yourself against the looming income tax hikes ahead.

Estate Taxes

When it comes to estate taxes, the forecast is almost as grim. The exemption, which is the threshold of wealth that can be passed on tax-free to heirs, is also set to plummet from $25 million to around $5 million (adjusted to inflation) by 2026 when the TCJA expires. This dramatic reduction threatens the very core of an inheritance plan, leaving your beneficiaries staring at a diminished legacy. 

What was once a straight path to passing down your hard-earned wealth is now a winding obstacle course. That means that estate planning is no longer optional, but absolutely vital to shield your heirs from the impending tax consequences. 

RMD Taxes

Required minimum distributions (RMDs) pose a critical challenge for business owners in their 60s with substantial IRAs/PSPs. The point is, this isn’t about skirting immediate tax burdens, but, rather, leaving a lasting legacy.

Navigating the RMD tax landscape goes beyond compliance—it requires strategic planning. Look to leverage every tool available to manage this tax dilemma, such as Roth conversions, charitable contributions, and meticulous distribution planning.

Tax Tsunami

While we all go about our daily business, a tax tsunami gathers force, driven by a staggering $33 trillion government debt, the echo of inflationary waves (Bidenflation), and government spending that has devoured nearly 40% of the U.S. GDP. 

It’s clear that now is the time to predict and prepare. Let’s briefly discuss each: 

Inflation

According to a 2023 Financial Times-Michigan Ross survey, the majority of people are worried about overall economic stability and having less buying power, with 76% percent of Americans having a negative outlook on economic conditions in the U.S. and 74% citing rising food prices as having the greatest impact on their finances. 

$33 Trillion Debt

The fact is this debt didn’t develop overnight—it’s been accumulating for years, only now it’s reached unprecedented levels. The Bureau of the Fiscal Service attributes this debt to years of budgetary imbalances, widespread unemployment, and the compounding effect of borrowing to cover deficits. As a small business owner navigating this economic landscape, it’s crucial to appreciate the consequences of this massive debt.

U.S. GDP

Simply put, government spending is rapidly escalating, nearing a point where it accounts for nearly 40% of the country’s total economic output. If you’re a small business owner looking to prepare for potential tax impacts, it’s critical to understand the implications of such extensive government spending. 

Your Personal Tax Survival Guide 

Picture this moment as planting a tree for your financial future—20 years ago would have been ideal, but today is your second chance. Consider this your opportunity to build your financial future, shield your hard-earned money, and manage your legacy.

And we can help guide you there.