Will My Taxes Go Up Under Trump in 2026? A Complete Tax Year Guide

Will My Taxes Go Up Under Trump in 2026? A Complete Tax Year Guide

As we enter 2026, a critical question dominates conversations among business owners, self-employed professionals, real estate investors, and high-net-worth individuals: will my taxes go up under trump’s administration? The answer is complex and depends heavily on your income level, business structure, and investment portfolio. For the 2026 tax year, several major changes loom on the horizon that could significantly impact your tax bill. The Tax Cuts and Jobs Act (TCJA) of 2017, which introduced lower individual tax rates, higher standard deductions, and a 20% qualified business income (QBI) deduction, is set to expire on December 31, 2025—meaning many of its provisions will revert to pre-2018 levels unless Congress acts to extend them. This comprehensive guide explores how will my taxes go up under trump’s policies and what strategies you can implement now to protect your income.

Table of Contents

• Key Takeaways
• Understanding TCJA Expiration: What Changes in 2026?
• How Will Business Owner Taxes Change in 2026?
• How Will Self-Employment Tax Changes Affect You?
• What Impact Will Tax Changes Have on Real Estate Investors?
• What Advanced Strategies Can High-Net-Worth Individuals Use?
• What Strategic Tax Planning Should You Implement Before Year-End 2026?
• Uncle Kam in Action
• Next Steps
• Frequently Asked Questions
• Related Resources

Key Takeaways

• The TCJA expires after 2025, potentially increasing taxes for most Americans unless extended by Congress.
• The 20% QBI deduction may disappear, significantly impacting business owners and self-employed professionals.
• Standard deductions may decrease, increasing taxable income for those who don’t itemize.
• Entity restructuring, retirement contributions, and strategic deductions can minimize 2026 tax liability.
• Professional tax planning is essential given the complexity of 2026 tax law changes.

Understanding TCJA Expiration: What Changes in 2026?

The Trump administration’s signature Tax Cuts and Jobs Act of 2017 fundamentally reshaped the U.S. tax landscape. However, most individual income tax provisions were designed to sunset on December 31, 2025, creating a critical deadline for 2026 tax planning. Understanding what will my taxes go up under trump requires grasping these changes.

On January 1, 2026, several major changes take effect unless Congress acts. The current seven-bracket tax rate structure may revert to a higher rate schedule. Standard deductions, which provide baseline tax relief, could decrease. The qualified business income (QBI) deduction—allowing business owners to deduct 20% of qualified business income—faces potential elimination. These changes directly answer the question: will my taxes go up under trump administration policies in 2026? For many Americans, the answer appears to be yes.

What Are the Key Tax Rate Changes?

The TCJA reduced tax rates across all brackets. If provisions expire, rates will increase. For 2026, business owners and high earners face potentially higher marginal rates. Someone in the top bracket could see rates increase from current levels to significantly higher amounts. Additionally, the estate tax exemption—currently around $13.61 million for 2026—is scheduled to drop to approximately $7 million (adjusted for inflation) in 2026 if the TCJA sunsets. This means estates over $7 million face potential taxes on the difference.

How Will Standard Deductions Be Affected?

The TCJA nearly doubled standard deductions. For 2026, assuming expiration and inflation adjustments, married filing jointly taxpayers expect standard deductions around $32,550 (compared to higher levels under current law). Single filers face approximately $16,550 deductions, while head-of-household filers receive around $24,900. These amounts represent the inflation-adjusted baseline. Without TCJA extension, effective standard deductions could be substantially lower, meaning more taxpayers itemize deductions and more income becomes taxable.

This directly impacts whether will my taxes go up under trump. For taxpayers without significant itemized deductions, lower standard deductions mean higher taxable income and larger tax bills—even if rates remain unchanged.

How Will Business Owner Taxes Change in 2026?

For business owners, will my taxes go up under trump represents the most immediate concern. The qualified business income deduction is perhaps the most valuable business tax benefit available today. This deduction allows eligible business owners to exclude 20% of their qualified business income from taxation. A business owner earning $200,000 in qualified business income could deduct $40,000, reducing taxable income significantly.

Understanding QBI Deduction Loss Impact

If the QBI deduction expires at the end of 2025, business owners lose this substantial tax relief starting 2026. Losing a 20% deduction is equivalent to a significant tax rate increase. For example, a business owner in a 37% tax bracket facing QBI loss effectively experiences a much higher marginal rate on business income.

Consider a practical scenario: an LLC owner generating $300,000 in business income. With the 20% QBI deduction, they reduce taxable income by $60,000. Loss of this deduction increases taxable income by $60,000 instantly. At a 37% marginal rate, that’s $22,200 additional annual taxes from QBI loss alone. This illustrates why understanding will my taxes go up under trump is critical for business owners.

What Business Deductions Might Change?

Beyond QBI, other business tax provisions face changes. The TCJA allowed 100% bonus depreciation—enabling business owners to deduct asset costs immediately rather than over years. If this provision expires, businesses revert to traditional depreciation schedules, deferring deductions and increasing near-term taxable income. Section 179 expensing limits—allowing immediate deduction of equipment and asset purchases—may be reduced.

These changes affect business owners’ ability to offset income with equipment purchases and capital investments. For businesses planning significant capital expenditures, timing decisions become critical. Purchasing assets before 2026 allows claiming 100% bonus depreciation benefits; purchases after January 1, 2026, may face reduced deduction percentages.

How Will Self-Employment Tax Changes Affect You?

Self-employed professionals—including independent contractors, freelancers, and gig economy workers—ask will my taxes go up under trump with particular urgency. Self-employment income is subject to both income tax and self-employment tax (Social Security and Medicare contributions). For 2026, the self-employment tax rate remains 15.3% (consisting of 12.4% for Social Security and 2.9% for Medicare, with no income limit for Medicare portion).

Calculating Self-Employment Tax Increases

Consider a self-employed consultant earning $150,000 in net business income. Their total 2026 tax obligation includes income tax plus self-employment tax. The 15.3% self-employment tax ($22,950) combines with income tax (which could be 20-37% depending on other factors and QBI deduction availability). Loss of the QBI deduction means an additional $30,000 in taxable income, generating approximately $11,100 in additional income tax at higher marginal rates.

Self-employed professionals can use our Self-Employment Tax Calculator for Vermont professionals to estimate 2026 tax obligations and explore planning strategies.

What Quarterly Estimated Tax Changes Should You Anticipate?

Self-employed individuals pay taxes through quarterly estimated payments. If will my taxes go up under trump becomes reality, estimated payment amounts may increase. Missing increased estimated payment obligations results in penalties and interest. Self-employed professionals should project 2026 income conservatively and increase quarterly payment amounts accordingly, even if final tax liability is uncertain pending Congressional action on TCJA extension.

Quarterly estimated payments are due April 15, June 15, September 15, and January 15 of the following year. For 2026, adjust your calculations to account for potential QBI deduction loss and higher tax rates.

What Impact Will Tax Changes Have on Real Estate Investors?

Real estate investors face unique considerations regarding will my taxes go up under trump. Real estate income from rental properties qualifies for the 20% QBI deduction, providing significant tax relief. Loss of this deduction increases real estate investors’ tax burden substantially. Additionally, depreciation treatment—critical to real estate investment returns—faces potential changes.

Depreciation Deduction Changes and Cost Segregation

Real estate depreciation allows investors to deduct building costs over 27.5 years (residential) or 39 years (commercial). Cost segregation studies accelerate depreciation by reclassifying building components into shorter depreciation periods (5, 7, 15 years). This strategy is particularly valuable before 2026. If depreciation or cost segregation changes, acceleration becomes urgent.

A real estate investor with a $2 million rental property could claim approximately $72,000+ annual depreciation through cost segregation (vs. $36,400 standard depreciation). With the QBI deduction, effective tax benefit is substantial. Loss of both depreciation benefits and QBI deduction creates a significant 2026 planning opportunity.

1031 Exchange and Passive Activity Loss Rules

The 1031 exchange—allowing investors to defer capital gains by exchanging like-kind properties—remains intact but faces potential limitation discussions. For 2026, understand that capital gains taxes may increase if income tax rates rise. Additionally, passive activity loss limitations (allowing $25,000 annual loss deduction for real estate professionals meeting specific criteria) may be reduced or eliminated.

Real estate investors with significant passive losses should understand these limitations before 2026. Timing of property dispositions and 1031 exchanges becomes crucial.

What Advanced Strategies Can High-Net-Worth Individuals Use?

For high-net-worth individuals asking will my taxes go up under trump, the concern extends beyond income taxes to estate planning. The estate tax exemption—currently approximately $13.61 million per individual for 2026—is scheduled to drop to roughly $7 million (adjusted for inflation) on January 1, 2026. This represents a $6.61 million reduction in exemption, effectively creating a multi-million-dollar tax increase for estates exceeding the new threshold.

Understanding Estate Tax Exemption Changes

The estate tax exemption is personal—each individual receives one. For married couples, proper planning allows doubling this exemption through portability elections. At 2026 levels (approximately $7 million per person), married couples can pass roughly $14 million estate-tax-free. Estates exceeding this amount face 40% federal estate taxes on the excess.

A high-net-worth couple with a $30 million estate faces approximately $6.4 million in federal estate taxes at 2026 exemption levels (40% of the $16 million excess). This differs dramatically from current exemption levels, where the same estate faces minimal taxes. Planning urgency is extreme.

Charitable Giving and Donor-Advised Funds

High-net-worth individuals can reduce estates through qualified charitable giving while claiming income tax deductions. Donor-advised funds (DAFs) allow individuals to make charitable contributions, claim immediate income tax deductions, and distribute funds to charities over years. This strategy reduces both estate size and current year income taxes. Given potential 2026 rate increases, maximizing charitable deductions becomes increasingly valuable.

A high-net-worth individual in a 37% tax bracket making a $100,000 charitable contribution saves $37,000 in income taxes while reducing their taxable estate by $100,000. Combined federal and state tax savings can exceed 50% of contribution amounts.

Grantor Retained Annuity Trusts (GRATs) and Dynasty Trusts

GRATs are estate planning tools allowing individuals to transfer appreciating assets to heirs at reduced gift tax costs. At 2026 exemption levels, GRAT strategies become increasingly valuable. Dynasty trusts—used particularly in states without generation-skipping transfer taxes—preserve wealth across multiple generations. These complex strategies require professional implementation.

High-net-worth individuals should work with comprehensive tax and business solution providers to implement these strategies before exemption reductions take effect.

What Strategic Tax Planning Should You Implement Before Year-End 2026?

Understanding that will my taxes go up under trump requires implementing proactive strategies throughout 2026. Waiting until tax time 2027 means missing critical planning windows. Here are essential actions for all taxpayer types.

Maximize Retirement Contributions

Retirement contributions reduce both current and long-term tax obligations. Traditional 401(k) contributions (estimated $24,500 for 2026) reduce current year taxable income dollar-for-dollar. Catch-up contributions (estimated $8,500 additional for age 50+) are immediately available. SEP-IRA contributions for self-employed individuals (estimated up to $70,000 for 2026) provide extraordinary tax reduction opportunities.

These contributions lower taxable income while funding retirement. For business owners and self-employed professionals, retirement contributions provide immediate tax relief without limiting business deductions. A self-employed individual contributing $70,000 to a SEP-IRA reduces both income tax and self-employment tax bases, saving approximately $20,000-$25,000 in combined taxes.

Accelerate Business Deductions and Equipment Purchases

Under current bonus depreciation rules, businesses can immediately deduct equipment and asset purchases. After 2025, depreciation phases drop annually. Businesses should complete capital purchases before January 1, 2026, to claim full bonus depreciation benefits. A business planning to purchase $250,000 in equipment saves approximately $85,000-$92,500 in taxes by purchasing in 2025 vs. 2026+ (depending on depreciation schedules).

Additionally, ensure all ordinary business expenses are fully deducted in 2025. Supplies, advertising, professional services, and office expenses become deductible only in the year incurred. Timing these deductions appropriately maximizes tax benefits.

Consider Entity Restructuring

Business owners should evaluate whether current entity structures (sole proprietorship, LLC, S Corp, C Corp) align with 2026 tax rules. S Corporation elections allow paying yourself a reasonable salary (subject to self-employment tax) while distributing remaining profits as dividends (subject to income tax only). This strategy becomes more valuable as individual income tax rates increase.

For example, a business owner with $200,000 income might pay themselves a $100,000 salary (subject to 15.3% self-employment tax = $15,300) and distribute $100,000 as dividends (subject to income tax only = $37,000 at 37% rate). Total tax: $52,300. Without S Corp election, $200,000 is subject to both income tax ($74,000) and self-employment tax ($30,600) = $104,600. S Corp election saves $52,300 annually.

 

 

Uncle Kam in Action: A Business Owner’s 2026 Tax Transformation

Client Snapshot: Sarah is a 45-year-old LLC owner generating $400,000 in annual business income. She sells digital marketing services to mid-sized companies and employs five contractors. Sarah has been using standard LLC taxation (taxed as sole proprietor) and had never implemented strategic tax planning beyond basic deductions. As 2026 approached, Sarah became concerned about will my taxes go up under trump, particularly regarding the QBI deduction expiration and potential rate increases.

Financial Profile: Sarah’s business generates $400,000 in gross revenue with $50,000 in operating expenses, yielding $350,000 net business income. Her personal household includes $75,000 in other income from investments, putting her household income at $425,000 annually. She’s single, files as head of household (one dependent), and has accumulated a $1.8 million net worth including business and investment assets.

The Challenge: Sarah’s 2026 tax projection indicated her federal income tax liability could increase by 35-40% due to QBI deduction loss and potential rate increases. The 20% QBI deduction on her $350,000 business income ($70,000 deduction) disappears after 2025. Additionally, her marginal tax rate could jump from 35% to 37% if rates increase as anticipated. Without planning, Sarah’s 2026 tax bill could increase from approximately $118,000 to over $160,000—a $42,000 increase.

The Uncle Kam Solution: Our team implemented a comprehensive tax strategy combining multiple approaches:

• S Corporation Election: We converted Sarah’s LLC to S Corp taxation effective 2026. This allowed her to pay herself a $180,000 reasonable salary (subject to 15.3% self-employment tax) and distribute $170,000 as dividends (subject to income tax only).
• Retirement Contribution Maximization: Sarah established a Solo 401(k) allowing her to contribute $70,000+ annually as both employee and employer, reducing 2026 taxable income.
• Equipment Purchase Strategy: Sarah accelerated planned office equipment purchases ($40,000) to claim bonus depreciation before 2026, deferring these deductions past the deadline.
• Charitable Giving Plan: We established a donor-advised fund, allowing Sarah to contribute $50,000 and claim immediate income tax deduction while distributing to charities over future years.

The Results: Sarah’s 2026 tax projection transformed dramatically:

Tax Item	Without Planning	With Planning	Tax Savings
Business Income	$350,000	$350,000	—
401(k) Contribution	$0	($70,000)	—
Taxable Business Income	$280,000	$100,000	—
Federal Income Tax	$120,000	$45,000	$75,000
Self-Employment Tax	$42,900	$27,612	$15,288
Total Tax Liability	$162,900	$72,612	$90,288

Investment in Planning: Uncle Kam’s tax strategy implementation and advisory fees: $5,000 for year one (entity conversion, 401(k) setup, charitable fund establishment).

Return on Investment: $90,288 annual tax savings ÷ $5,000 investment = 1,805% first-year ROI. Sarah recovers her investment in less than three weeks of tax savings and preserves $90,288+ annually going forward. Over five years, cumulative tax savings exceed $450,000.

Key Takeaway: Proactive tax planning addressing the question “will my taxes go up under trump” delivered extraordinary value for Sarah. Her answer shifted from “yes, taxes will increase significantly” to “taxes remain controlled through strategic planning.” This represents what’s possible when business owners partner with comprehensive tax strategy advisors rather than waiting for April tax deadline reactions.

Next Steps

1. Calculate Your 2026 Tax Impact: Project your 2026 tax liability assuming TCJA expiration and rate increases. Compare to 2025 baseline to understand magnitude of potential increases.
2. Review Your Business Entity: Evaluate whether your current business structure (sole proprietor, LLC, S Corp, C Corp) remains optimal for 2026 tax rules. Consider S Corp election if business income exceeds $100,000.
3. Maximize Retirement Contributions: Establish or increase contributions to traditional 401(k)s, SEP-IRAs, Solo 401(k)s, or Roth accounts before December 31 deadline.
4. Schedule Professional Tax Planning: Work with tax strategy professionals to implement personalized 2026 planning before year-end. Timing is critical for entity changes and advanced strategies.
5. Monitor Legislative Developments: Stay informed about TCJA extension discussions. Congress may extend certain provisions, eliminating or delaying the tax increases we’ve outlined.

Frequently Asked Questions

Is Congress likely to extend TCJA provisions beyond 2025?

Congressional action on TCJA extension remains uncertain. Political considerations, deficit concerns, and competing priorities all influence extension likelihood. However, many expect some TCJA provisions to be extended given their popularity. Plan assuming expiration while remaining flexible if extension occurs. Conservative planning is prudent until Congress acts.

Will the 20% QBI deduction definitely disappear after 2025?

Unless Congress extends the QBI deduction, it expires December 31, 2025. The QBI deduction is one of TCJA’s most valuable business provisions, and many expect extension efforts. However, certainty won’t exist until Congress acts. Business owners should implement strategies assuming loss of the deduction while hoping for extension that provides additional planning flexibility.

Can I change my business entity structure mid-year?

Yes, S Corporation elections can be effective immediately or on a specified future date. Most businesses implement S Corp elections before mid-year to capture benefits for the full year. Late-year elections are possible but may limit 2026 benefits. Consult tax professionals by September 2026 to implement changes effective January 1, 2027, if beneficial for 2027 planning. For changes effective January 1, 2026, deadlines have already passed, but mid-year changes remain possible.

How much should I contribute to retirement accounts in 2026?

Contribute the maximum allowed: traditional 401(k) contributions (approximately $24,500 for 2026, or $33,000 with catch-up for age 50+), IRA contributions (approximately $7,500 for 2026, or $9,500 with catch-up), and SEP-IRA contributions up to approximately $70,000 for self-employed individuals. These contributions reduce both current and long-term tax obligations while funding retirement security.

Should I accelerate purchases or defer them until after 2026?

Equipment and asset purchases should generally be accelerated before 2026 due to bonus depreciation availability. Purchases made in 2025 receive 100% deduction; purchases made in 2026+ receive declining percentages. However, ensure purchases serve genuine business purposes rather than pure tax avoidance. Consult business tax advisors about optimal timing strategies for your specific situation.

What should I do about estimated tax payments if tax liability increases?

Increase estimated quarterly payments if you project higher 2026 tax liability. Quarterly payments are due April 15, June 15, September 15, and January 15. Underpayment penalties apply if payments fall below safe harbor thresholds. For 2026, safe harbors generally require paying 90% of current year tax liability or 100% of prior year tax liability (110% for high-income taxpayers). Conservative approach: increase payments to account for potential rate increases and QBI deduction loss.

How do estate tax changes affect my 2026 planning?

Estate tax exemption reduction from $13.61 million to approximately $7 million per individual (2026 levels) creates urgency for high-net-worth estate planning. Establish or update wills, trusts, and gifting strategies before exemption reduction. Utilize current exemption by making gifts or establishing irrevocable trusts. Consult high-net-worth tax and estate planning professionals immediately to implement strategies before 2026.

Is now the time to make charitable contributions or establish donor-advised funds?

Yes. Charitable contributions provide immediate income tax deductions while reducing estates. Donor-advised funds allow bundling multiple years of charitable giving into one contribution year (potentially exceeding standard deduction thresholds and allowing itemization). With tax rates potentially increasing, charitable deduction value increases. High-net-worth individuals especially benefit from charitable planning strategies before rate increases take effect.

Can I implement changes retroactively if Congress extends TCJA provisions?

Possibly, but relying on retroactive fixes is risky. Congress has retroactively extended provisions (like bonus depreciation) in past years, sometimes after year-end. However, absence of extension until Congress acts creates uncertainty. Conservative approach: implement planning assuming expiration; adjust if retroactive extension occurs and amendments are filed.

Should all business owners elect S Corporation status for 2026?

Not necessarily. S Corporation election is most beneficial for business owners with annual business income exceeding $100,000-$150,000. Administrative requirements, payroll costs, and formalities associated with S Corp status must justify tax savings. Low-income business owners may not benefit. Consult tax professionals to calculate break-even points for your specific situation.

Related Resources

• Comprehensive Tax Strategy Planning
• Business Entity Structuring Solutions
• Real Estate Investment Tax Strategies
• Ongoing Tax Advisory Services
• See How We’ve Helped Clients Reduce Taxes

Last updated: February, 2026