The year is almost over, but there is still time for individuals and business owners to take advantage of valuable federal tax-saving opportunities.
As 2026 winds down, many taxpayers are already thinking about filing their returns next spring. But here’s the problem: by the time tax season arrives, some of the best opportunities to reduce your tax bill may have already disappeared.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several new tax deductions, expanded existing benefits, and restored certain business tax incentives. While some provisions took effect in 2025, many remain available for the 2026 tax year.
The important question isn’t simply whether you qualify for these tax breaks. It’s whether there are steps you can take before December 31, 2026, to make the most of them.
New Deductions for Individuals
One of the most widely discussed provisions is the deduction for qualified overtime compensation. Eligible employees may deduct up to $12,500 in qualifying overtime pay, or $25,000 for married couples filing jointly. However, the deduction generally applies only to the overtime premium required under federal labor law, not the employee’s entire overtime paycheck. The benefit begins phasing out when modified adjusted gross income exceeds $150,000 for single taxpayers or $300,000 for married couples filing jointly.
Workers in qualifying tipped occupations may also deduct up to $25,000 in eligible tips. This deduction is subject to income limitations and specific occupational requirements. Importantly, these provisions do not eliminate Social Security or Medicare taxes on the compensation.
Another provision allows eligible taxpayers to deduct up to $10,000 annually in interest paid on qualifying loans for new personal-use vehicles. The vehicle must meet specific requirements, including final assembly in the United States. Used vehicles and leases do not qualify, and income limitations apply.
For taxpayers age 65 or older, an additional deduction of up to $6,000 per qualifying individual, or $12,000 for an eligible married couple, remains available in 2026. This benefit is in addition to the existing standard deduction and the additional standard deduction for age. It begins phasing out at modified adjusted gross income above $75,000 for single taxpayers and $150,000 for joint filers.
These four deductions are available to eligible taxpayers whether they itemize or claim the standard deduction.
A Bigger Deduction for State and Local Taxes
For taxpayers living in high-tax states such as New Jersey, the expanded state and local tax deduction could be particularly valuable.
For 2026, the federal deduction limit for qualifying state and local taxes is $40,400, compared with the previous $10,000 limitation. The expanded deduction begins phasing down for taxpayers with modified adjusted gross income exceeding $505,000, subject to a minimum deduction cap of $10,000.
This creates an opportunity for taxpayers who itemize to review their property taxes, state income taxes, and other qualifying payments before year-end. However, accelerating payments is not automatically beneficial. The timing of deductions, alternative minimum tax exposure, and individual circumstances should all be evaluated.
Significant Tax Opportunities for Business Owners
Business owners have additional opportunities that deserve attention before the end of the year.
One of the most significant changes is the restoration of 100% bonus depreciation for qualifying business property acquired after January 19, 2025. This generally allows businesses to deduct the entire cost of eligible equipment, machinery, computers, and certain other assets in the year they are placed in service, rather than depreciating them over several years.
The OBBBA also substantially increased the Section 179 expensing limits, allowing businesses to immediately deduct larger amounts of qualifying property, subject to annual limits and other restrictions.
For business owners considering equipment purchases, technology upgrades, or other capital investments, the timing of those expenditures could have a meaningful impact on their 2026 tax liability. However, purchasing equipment simply to obtain a deduction is rarely a sound business decision. The investment should make financial and operational sense first.
Other Benefits Worth Reviewing
The legislation also made the qualified business income deduction under Section 199A permanent, preserving a potentially valuable deduction of up to 20% of qualifying business income for eligible sole proprietors, partnerships, S corporations, and certain other taxpayers.
Families may benefit from the expanded Child Tax Credit, which increased to $2,200 per qualifying child, subject to eligibility requirements and income limitations.
Employers should also review expanded incentives for providing certain employee benefits. These include enhancements to the employer-provided childcare credit and the continued availability of tax-free educational assistance, including qualifying student loan repayment benefits.
Not every provision applies to every taxpayer, but overlooking an available deduction or credit can mean paying more in taxes than necessary.
Don’t Wait Until Tax Season to Start Planning
The biggest mistake taxpayers make is treating tax planning as something that happens when their returns are prepared.
Tax preparation reports what already happened. Tax planning gives you an opportunity to influence what happens next.
With the end of 2026 approaching, individuals should review their expected income, deductions, withholding, and eligibility for the new tax benefits. Business owners should also evaluate capital expenditures, projected profitability, retirement plan contributions, and other year-end decisions that could affect their tax liability.
Some opportunities require action before December 31, while others can still be addressed when preparing the return. Knowing the difference is essential.
The bottom line: The OBBBA created several tax-saving opportunities that remain available for 2026. But simply qualifying for a deduction does not guarantee you are making the most of it.
A little planning before year-end could make a meaningful difference when your tax return is filed next spring.
Make Your 2026 Tax Planning Count
At TITAN Business Development Group, we help individuals and business owners look beyond simply preparing tax returns. We examine their financial circumstances, identify potential tax-saving opportunities, and help them make informed decisions before important deadlines pass.
If you haven’t reviewed how the OBBBA affects your 2026 taxes, now is an excellent time to do so.
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Eric S. Degen, CPA Titan Accountancy, LLC
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