The 2026 landscape for financial advisors offers both complexity as well as opportunity as clients brace for sizable changes from years past. These changes create planning windows that require immediate attention, but they can also introduce tax traps for high-net-worth clients that advisors must navigate carefully.
From the sunsetting of many pieces of the Tax Cuts and Jobs Act of 2017 to adjustments brought on by the One Big Beautiful Bill Act (such as avoiding the dreaded estate tax “cliff”), tax planning opportunities are everywhere.
If your firm is managing clients across the wealth spectrum, the challenge is straightforward. Proactive tax planning is the only way to help clients avoid potentially higher than expected payments down the line.
Now, let’s look at the five most impactful changes for 2026 for estate and tax planning.
Top 5 Tax Changes in 2026 Advisors Need to Know
1. The $15 Million Estate Exemption Floor
The One Big Beautiful Bill Act replaced the feared estate tax “sunset cliff” with a permanent exemption floor of $15 million per individual, or $30 million for married couples, indexed for inflation. This resolves years of planning around a potential 50% drop to roughly $7 million exemption floor and materially changes how you can frame estate strategy discussions.
Instead of urgency-driven gifting, the planning objective shifts to growth management and asset freezing. High-net-worth clients no longer need to rush transfers simply to preserve exemption. They can focus on where future appreciation should live.
For many clients, this increases the relevance of structures such as Spousal Lifetime Access Trusts (SLATs) and Intentionally Defective Grantor Trusts (IDGTs). These strategies allow you to lock in today’s exemption while removing future growth from the taxable estate, without forcing irreversible liquidity decisions.
Advisory Impact: Shift client conversations from “crisis gifting” to growth-focused planning. For clients with estates approaching $15 to $30 million, consider the use of SLATs and IDGTs to freeze asset values at this high baseline while preserving flexibility.
2. Managing the “SALT Torpedo” ($500k–$600k MAGI)
The OBBBA increased the State and Local Tax deduction cap to $40,000 beginning in 2026 (as adjusted for inflation, this is a cap of $40,400 for 2026 and will be adjusted 1% each year thereafter). On its face, that looks like relief. However, the provision includes a phaseout between $500,000 and $600,000 of Modified Adjusted Gross Income that creates a tax trap for impacted clients.
Within this $100,000 band, each additional dollar of income reduces the SALT deduction by 30 cents. When layered on top of federal and state marginal rates, this can push effective marginal tax rates north of 45 percent.
You should assume that clients hovering near this threshold will experience meaningful tax friction if their income timing is not coordinated. Capital gains realization, trust distributions, Roth conversions, and bonus income all matter more inside this narrow window than outside it. It is also worth nothing that the increased SALT cap will sunset, absent further congressional action, beginning in 2030, when it set to revert back to $10,000.
Advisory Impact: Use scenario modeling to time capital gains, trust distributions, and other income events outside the $500,000 to $600,000 MAGI band. For clients who cannot avoid this range, consider strategies to reduce MAGI such as increased 401(k) contributions or funding a Health Savings Account.
3. Permanence of the 20% QBI Deduction (Section 199A)
The OBBBA made the 20 percent Qualified Business Income deduction permanent, expanded the phase-in ranges to $150,000 for joint filers, and introduced a $400 minimum deduction for active business owners.
If you’re working with founders and closely held businesses, this change removes a major planning uncertainty. The effective top federal rate on qualifying pass-through income now stabilizes at just above 29 percent, which impacts business decisions like entity selection, compensation strategy, and exit planning.
More importantly, the permanence of this change creates a chance to do more long-term modeling. You can now evaluate S-corporation salary splits, aggregation strategies, and succession scenarios without assuming a rate shock a few years down the line.
Advisory Impact: Review entity structure and compensation strategies for pass-through clients. The permanent effective rate changes the calculus for business succession planning and Roth conversion timing. For closely held businesses planning exits, model QBI impact across multiple tax years.
4. Mandatory Roth Catch-Ups for High Earners
Beginning January 1, 2026, the SECURE 2.0 Act requires workers age 50 and older who earned more than $150 ,000 to make catch-up contributions on a Roth basis.
This is not an optional decision; it is a plan design requirement. In 2026, the limit for catch-up contributions increases to $8,000.
If you recall, SECURE 2.0 was enacted back in 2022 but this part of the Act has been delayed until now.
Advisory Impact: This is a mandatory plan design change. It’s also important to note that if a client’s employer plan does not offer a Roth feature by 2026, high earners won’t have the ability to take advantage of these catch-up contributions. You should audit client 401(k) plans now to verify if this strategy is available to them.
5. The “Senior Deduction” Planning Window (2026–2028)
For tax years 2026 through 2028, taxpayers age 65 and older receive a new $6,000 deduction, or $12,000 for married couples, layered on top of existing standard or itemized deductions.
Unlike some of the other permanent changes we’ve covered, this provision is temporary.
For retirees with moderate income, the deduction creates a short-term opportunity to absorb additional taxable income without increasing marginal rates. In practice, this makes tax bracket management with Roth conversions more efficient during this three-year window.
The opportunity is most relevant for retirees who can keep Modified Adjusted Gross Income below $75,000 (single) or $150,000 (joint) while converting portions of traditional IRAs.
Advisory Impact: Identify clients age 65 and older with traditional IRA balances and MAGI below the thresholds. Model multi-year Roth conversion planning for 2026 through 2028 to maximize the benefit of the temporary senior deduction before it expires.
What These Tax Changes Mean for Your Advisory Firm
These 2026 tax changes reward proactive planning. Each of these five provisions covered here creates a window where strategic timing can deliver measurable client value, for both long-term and short-term tax strategies.
For you and your firm, this translates to an increased need for scenario modeling, income timing coordination, and multi-year tax projections. The firms that deliver this level of planning will have an incredible opportunity to strengthen client relationships and differentiate their practice.
To see how your firm can model these 2026 tax changes and turn them into measurable planning value, learn more about Wealth.com Tax Planning at wealth.com/tax.
Disclaimer: Wealth.com does not provide legal, tax, or investment advice. The choice of trust jurisdiction depends on your client’s specific family dynamics, asset mix, and goals.
