Published Aug. 28 2026 • WebsterRogers LLP

The tax rules changed. Does that mean your year-end strategy should change, too?

Maybe.

Some of the most important provisions in last year’s federal tax legislation took effect in 2026. Others changed familiar strategies involving charitable giving, estate planning, business deductions, real estate investments, and state and local taxes.

But a new tax rule does not automatically mean you should change what you’re doing. What matters is how the rule affects your income, investments, business interests, and longer-term plans.

You might be asking: What should I consider doing differently before December 31, 2026?

Year-end tax planning isn’t about chasing every new deduction. It’s about understanding which changes affect your financial picture and making those decisions while you still have time to act.

Changes Impacting Year-End Planning

Here are several 2026 tax law changes that could affect year-end planning.

1. Higher Estate and Gift Tax Exemptions Create New Planning Opportunities

In 2026, the federal estate and gift tax exemption increased to $15 million per individual or potentially $30 million for a married couple.

But a larger exemption does not make estate planning unnecessary. Families may want to revisit:

• Lifetime gifting strategies.
• Existing trusts and estate documents.
• Ownership and titling of real estate and business interests.
• Assets that may be better transferred during life versus held for a potential step-up in basis.
• Multi-generational wealth transfer plans.

For families with substantial estates, year-end planning should consider both estate tax exposure and the income tax consequences of transferring appreciated assets.

2. The Higher SALT Deduction Could Change Itemizing Decisions

The state and local tax (SALT) deduction cap is $40,400 for 2026, although the benefit begins phasing down for taxpayers with income above certain thresholds.

That can be especially important for taxpayers living in high-tax states or owning significant real estate.

The higher cap may make itemizing deductions more attractive for some taxpayers who previously received little or no federal benefit from property and state income taxes.

However, income matters. Higher-income taxpayers should calculate how much of the increased deduction will be available before making year-end decisions.

3. Charitable Giving Rules Changed in 2026

Charitable giving deserves particular attention this year.

Beginning in 2026, taxpayers who itemize are generally subject to a new floor equal to 0.5% of adjusted gross income before charitable contributions generate an itemized deduction.

Taxpayers in the highest federal income tax bracket also face a limitation on the tax benefit associated with itemized deductions.

At the same time, taxpayers who do not itemize can now claim a deduction for qualifying cash contributions of up to $1,000 for single filers and $2,000 for married couples filing jointly.

For individuals and families who make significant charitable gifts, this may change the value of simply making the same contributions on the same schedule every year.

Strategies worth discussing may include:

• Bunching multiple years of charitable contributions.
• Using a donor-advised fund.
• Donating appreciated securities rather than cash.
• Coordinating charitable giving with unusually high-income years.
• Reviewing qualified charitable distributions for eligible IRA owners.

4. The Qualified Business Income Deduction Is Here to Stay

The qualified business income, or QBI, deduction was made permanent.

For eligible owners of pass-through businesses, the deduction can generally equal up to 20% of qualified business income, subject to income thresholds and other limitations.

This can be particularly important for partners, LLC members, S corporation shareholders, real estate businesses, law firm partners, and owners of professional service firms.

Making the deduction permanent also creates more certainty for longer-term planning.

Before year-end, you may want to review projected taxable income, compensation, retirement contributions, business structure, and other factors that can affect the QBI calculation.

5. Business Investment May Offer Larger Upfront Deductions

Businesses considering equipment or other qualifying property purchases have another reason to review year-end capital spending.

The new tax law permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Section 179 expensing limits were also increased.

For real estate businesses and professional service firms making substantial investments, the timing of purchases and when property is placed in service can significantly affect deductions.

However, a large deduction is not automatically the best answer. Evaluate accelerating deductions into 2026 alongside expected income, financing, cash flow, and future tax rates.

For real estate owners, this is also an opportunity to review depreciation strategies and whether a cost segregation study could make sense for recently acquired, constructed, or renovated property.

6. Business Interest Expense Rules Deserve Another Look

Businesses and real estate owners with significant debt should revisit the rules governing business interest expense deductibility.

Changes to the Section 163(j) limitation can affect the calculation of adjusted taxable income and, ultimately, the amount of business interest that may be deductible.

This can be particularly relevant for leveraged real estate investments, partnerships, and growing businesses using debt to finance expansion or acquisitions.

Rather than looking at interest expense after year-end, modeling the potential limitation before December 31 gives you more time to consider financing and tax-planning options.

7. Year-End Reporting Requirements Have Changed

Some of the new tax rules also affect payroll and information reporting.

Beginning with payments made in 2026, the reporting threshold for certain Form 1099 payments increased from $600 to $2,000.

Employers also face new reporting requirements related to qualified tips and overtime. Payroll and accounting systems must properly identify and track these amounts so year-end forms can be prepared correctly.

For businesses, waiting until January to discover that payroll or accounting data was not captured properly can create unnecessary work.

What Should You Review Before December 31, 2026?

Year-end tax planning should be based on more than a list of new tax rules. The value comes from seeing how those rules interact with your income, investments, business interests, real estate, estate plan, and long-term goals.

Before year-end, consider reviewing:

• Projected 2026 taxable income.
• Capital gains and losses.
• Pass-through business income and the QBI deduction.
• Real estate acquisitions, improvements, depreciation, and cost segregation opportunities.
• Business equipment and capital expenditures.
• Charitable giving.
• State and local tax deductions.
• Estate and lifetime gifting plans.
• Retirement plan contributions.
• Business interest expense.
• Payroll and information-reporting requirements.

The right strategy may also involve looking beyond 2026. Accelerating a deduction or deferring income can save taxes this year, but the better decision depends on what you expect your tax position to look like in 2027 and beyond.

FAQs

What should I review for year-end tax planning in 2026?

Start with projected taxable income, capital gains and losses, charitable giving, retirement contributions, business income and expenses, real estate activity, major purchases, and planned gifts or wealth transfers. Business owners should also review depreciation, business interest expense, QBI eligibility, and year-end reporting requirements.

How did charitable contribution deductions change in 2026?

Beginning in 2026, itemizers generally face a 0.5% of adjusted gross income floor on charitable deductions. Non-itemizers can claim a deduction of up to $1,000 for single taxpayers or $2,000 for married couples filing jointly for qualifying charitable contributions. These changes may make it worth reconsidering the timing and structure of charitable gifts.

What 2026 tax changes should business owners pay attention to?

Business owners should review changes involving bonus depreciation, Section 179 expensing, the qualified business income deduction, business interest expense, certain employee compensation rules, and information reporting. The impact will vary significantly based on the business structure, income, planned investments, and other factors.

When should I start year-end tax planning for 2026?

Ideally, before you make major financial decisions. Tax planning is most useful when you still have time to evaluate alternatives. Waiting until tax return preparation may be too late to change the timing of income, purchases, charitable gifts, business investments, or other transactions.

December 31 is a tax deadline. It shouldn’t be your tax planning date.

By the time your 2026 tax return is being prepared, many of the decisions that could have affected it will already have been made.

If you’re considering a significant business purchase, real estate transaction, charitable gift, wealth transfer, or other financial move, talk with your tax advisors while there is still time to evaluate your options.

About WebsterRogers

WebsterRogers LLP is a South Carolina-based accounting and consulting firm founded in 1984. The firm has seven offices across the state, including one in Myrtle Beach, and more than 140 professionals who serve industries such as tourism and hospitality, construction, healthcare, and manufacturing.