Tax Planning

Planning Ahead with Tax Year 2026 Inflation Adjustments: Strategy Tips for Individuals and Business Owners

With the IRS issuing updated tax thresholds and credits for 2026 under OBBB, this article helps you align your financial and tax planning to make the most of the changes.

By NomadicTax Research Team • 5-8 min read • November 19, 2025

## Overview of Key Inflation Adjustments for 2026 - **Standard Deduction Increases**: - Married Filing Jointly: rises to **$32,200**; - Single / Married Filing Separately: **$16,100**; - Heads of Households: **$24,150**. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) - **Marginal Rate Threshold Changes**: The income levels for each bracket increased; top rate (37%) for single individuals raising above **$640,600**, married couples above **$768,700**. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) - **EITC, Gift, Adoption Credits and HSA adjustments**: Enhanced limits across Earned Income Tax Credit, Health Savings Accounts, annual gift exclusions, adoption expenses. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) ## Planning Strategies to Maximize Tax Benefit 1. **Time income & expenses smartly**: If you anticipate being pushed into a higher bracket in 2026, consider accelerating deductible expenses into 2025 or deferring income until 2026 if more favorable. 2. **Reevaluate withholding & estimated taxes now**: With higher standard deductions and shifted thresholds, you might owe less—adjust withholding to improve cash flow. Conversely, make sure you’re not underpaying. 3. **Leverage pre-tax savings vehicles**: HSAs, retirement accounts, employer childcare credits—all benefits that grow with inflation adjustments. Maximize contributions early in the year. 4. **Consider marital status & filing status**: If your situation changed or could change (e.g. joint vs separate), assess which status will benefit under new brackets and deductions. 5. **Watch phase-outs & surtaxes**: Some deductions or credits diminish quickly once you cross thresholds—higher inflation means more people reach those limits. Plan round-the-edges carefully. ## Business Considerations Under OBBB - **Employer-Provided Childcare Credit**: Max employer credit increases from **$150,000 to $500,000** ($600,000 if small business) in 2026. Big incentive to either offer or expand childcare benefits. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) - **Foreign Earned Income Exclusion**: Up slightly, meaning digital nomads or expats gain more exclusion, but must watch location & tax treaties. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) - **Gift & estate planning**: The exclusion amounts rose, so wealthy individuals have larger windows to transfer assets without triggering taxes. Use gifting or trusts strategically for long-term estate planning. ## Examples of Application - **Individual Example**: Alex, single with income around $50,000, will see benefit from larger standard deduction and possibly owe less in 2026. Adjust withholding in late 2025 so less is withheld during 2026. - **Business Owner Example**: Maria runs a small business and offers childcare. With the new limit, she can better structure wrap-around benefits to employees. If she defers bonuses, she may reduce taxable income under new thresholds. ## What to Watch for in Late 2025 / Early 2026 - The IRS *Revenue Procedure 2025-32* contains full tables—review thoroughly for your specific situation (e.g. family size, business status). ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) - Changes to HSA limits (both deductible limits and minimum deductibles). Plan health coverage accordingly. ([irs.gov](https://www.irs.gov/irb/2025-21_IRB?utm_source=openai)) - Prepare for remittance excise tax beginning Jan 1, 2026: providers must collect 1 % tax on certain remittances with cash/money orders, etc. And the IRS will give limited penalty relief early on. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai)) ## Bottom Line Tax year 2026 brings meaningful inflation-driven opportunities and some hidden pitfalls. Use the updated standard deductions, credits, and other thresholds to your advantage—but don’t wait until filing season to adjust your plans.