2026 Tax Law Changes: OBBBA vs TCJA

As we enter 2026, the U.S. tax landscape looks very different than it did just a few years ago. The Tax Cuts and Jobs Act (TCJA) fundamentally reshaped individual and business taxation when it passed in 2017, but many of its most impactful provisions were designed to sunset after 2025. 

To address that, the One Big Beautiful Bill Act (OBBBA) steps in — preserving several key TCJA provisions and, in many cases, expanding or refining them to fit the needs of today’s business owners and high-net-worth families.

For entrepreneurs, founders, and ultra-high-net-worth individuals (UHNWIs), understanding 2026 tax law changes is essential for business tax planning in the coming year and beyond. Below, we break down the law through practical questions you’re likely already asking.

Recap: what was the TCJA designed to do?

The TCJA lowered tax rates, simplified tax brackets, expanded deductions, and introduced new incentives for business investment. Politically and fiscally, however, many of these benefits were enacted with expiration dates to limit long-term revenue impact.

Major individual-focused provisions — including lower marginal rates, the increased standard deduction, and the enhanced Child Tax Credit — were all scheduled to sunset after December 31, 2025. Business owners also faced uncertainty around depreciation rules, pass-through deductions, and interest expense limitations.

The OBBBA was crafted against this backdrop, with the goal of introducing permanence and predictability while refining areas that had proven complex or restrictive in practice.

What individual tax provisions did the OBBBA make permanent?

For high earners, one of the biggest takeaways is stability. OBBBA largely preserves the TCJA’s individual tax framework rather than allowing a reversion to pre-2018 rules.

Key updates include:

• Permanent retention of the TCJA marginal tax brackets
• Continued use of the higher standard deduction (indexed for inflation)
• Preservation of estate and gift tax exemption thresholds (with modest inflation-related growth)
• Extension of alternative minimum tax (AMT) relief for high-income filers

Provision	TCJA (2018 – 2025)	OBBBA (2026+)
Top Individual Rate	37%	37% (permanent)
Standard Deduction	Doubled	Permanent, indexed
Personal Exemptions	Eliminated	Eliminated
AMT Thresholds	Increased	Maintained

For UHNW families, estate planning conversations that once centered on “use it before the TCJA sunset” are now shifting toward long-term wealth transfer efficiency across generations.

How does the OBBA address the qualified business income (QBI) deduction?

The 20% Qualified Business Income deduction under Section 199A was one of TCJA’s most widely used — but also widely debated — provisions. Under the original law, it was scheduled to expire after 2025.

OBBBA keeps the deduction in place and makes targeted clarifications aimed at business owners who operate across multiple entities or industries.

Notable changes include:

• Permanent extension of the 20% deduction
• Simplified wage and capital limitation calculations
• Expanded eligibility for certain service-based businesses
• Clearer aggregation rules for commonly owned entities

For founders and entrepreneurs whose income flows through partnerships, S corporations, or sole proprietorships, the permanence of the QBI deduction allows for more reliable long-term modeling rather than short-term tax maneuvers.

What changed for business depreciation and capital investment?

Bonus depreciation was one area where TCJA favored rapid business expansion, but its scheduled phaseout created planning friction just a few years later.

OBBBA reestablishes more favorable depreciation rules while balancing fiscal restraint:

Category	TCJA (Original)	OBBBA Update
Bonus Depreciation	100%, phased down after 2022	Stabilized at 80%
Section 179 Expensing	Expanded	Maintained with higher caps
R&D Expensing	Mandatory amortization	Partial rollback for domestic R&D

By softening R&D capitalization requirements and restoring meaningful depreciation incentives, OBBBA encourages reinvestment without forcing business owners to accelerate or delay purchases solely for tax timing reasons.

How does OBBBA affect high-income earners?

For UHNW taxpayers, OBBBA largely avoids introducing radical new taxes while maintaining guardrails around income shifting.

Key implications include:

• Estate and gift tax exemptions remain historically high
• No reinstatement of pre-TCJA Pease limitation on itemized deductions
• SALT deduction remains capped but indexed modestly
• Continued emphasis on compliance over rate hikes

Rather than reintroducing complexity, OBBBA reinforces thoughtful structuring — particularly around trusts, family entities, charitable planning, and multigenerational wealth transfer.

How UHNW individuals might shift focus in 2026

For ultra-high-net-worth families, permanence changes the tone of planning conversations.

Rather than accelerating wealth transfers to avoid 2025 cliffs, families can focus on:

• Multigenerational gifting strategies
• Philanthropic planning integrated with business exits
• Long-term trust and governance design

OBBBA effectively shifts planning horizons from “before expiration” to “across decades.”

Did OBBBA change corporate tax rates?

Despite speculation about rate increases, OBBBA leaves the TCJA’s 21% flat corporate tax rate in place. Lawmakers instead focused on fine-tuning deductions and incentives to reward operational investment rather than financial engineering.

What this means for business owners:

• C corporations retain rate certainty
• Pass-through vs. C corp decisions remain strategic, not reactive
• International tax frameworks remain largely intact

For founders considering liquidity events or succession planning, rate stability can be more valuable than short-term reductions.

How should business owners rethink tax planning in 2026?

The most important shift introduced by OBBBA isn’t just what changed; it’s what didn’t.

With fewer sunsets looming, business tax planning in 2026 becomes less about rushing and more about alignment:

• Matching entity structure to long-term income goals
• Coordinating compensation, reinvestment, and capital deployment
• Integrating tax planning with estate, retirement, and liquidity strategies

Instead of asking “What expires next?” business owners can now ask, “How should this be structured if these rules are likely here to stay?”

Reassessing your tax planning strategy in 2026? Let’s talk.

The passage of OBBBA closes a chapter of uncertainty that followed the TCJA for nearly a decade. By making key provisions permanent — and refining others—  Congress has created a tax environment that rewards patience, strategy, and coordination over urgency.

If you’re reassessing your tax strategy under these new rules, a broader conversation that connects taxes to investment management, estate planning, and long-term goals can help turn legislative clarity into financial confidence.

Ready to discuss how these 2026 tax law changes fit into your broader wealth strategy? Connect with Avidian Wealth Solutions in Houston, Austin, Sugar Land, and The Woodlands to start the conversation.

Disclaimer – This material is provided for informational and educational purposes only and does not constitute tax, legal, or investment advice. Tax laws are subject to change, and their application depends on individual circumstances. Readers should consult their tax or legal advisor regarding their specific situation.

More Helpful Articles by Avidian: 

• Preparing to Sell Your Business? Read This First.
• Navigating Uncomfortable Conversations about Family Wealth
• How to Bring Up Conversations about Estate Planning
• Unique Careers that Require Special Financial Planning
• Is the Future of Wealth Female?

---

Please read important disclosures here