What OBBB Tax Changes Are Effective in 2026?

·        Trump account contributions beginning July 5, 2026 (as there is no contribution until 12 months after law was signed). Trump accounts are a new type of tax-advantaged savings account for children that are similar to traditional IRAs (but subject to different contribution rules and other modifications).

·        Private mortgage insurance (PMI) treated as interest expense. Beginning in 2026, OBBBA permanently restores the deduction for mortgage insurance premiums (previously available from 2018 through 2021) by treating such premiums as interest on acquisition indebtedness. Like the prior law, the deduction is phased out for adjusted gross income (AGI) above $100,000 ($50,000 for MFS). The deduction is phased out ratably by 10% for each $1,000 ($500 for married filing separately), or fraction thereof, by which the taxpayer’s AGI exceeds $100,000 ($50,000 for married filing separately). The deduction is therefore unavailable for taxpayers with an AGI exceeding $109,000 ($54,500 for married filing separately). The phaseout range is not indexed for inflation.

·        529 plan K-12 expense limit increased from $10,000 to $20,000.

·        1099-MISC and 1099-NEC threshold raised to $2,000 for payments beginning in 2026 (which are reported on Form 1099 in January 2027).

·        1% Remittance tax on overseas transfers.

·        AMT phaseout rules change. The phaseout begins earlier and the percentage changes.

·        0.5% floor on individual charitable contributions. The first 0.5% of your adjusted gross income (AGI) is not tax deductible.

·        1% floor on corporate charitable contributions. Contributions up to 1% of taxable income are not deductible.

·        90% gambling loss limit where tax deductible losses are limited to 90%.

·        $1,000 ($2,000 joint) charitable contribution for non-itemizers.

·        Itemized deductions are subject to a 2/37 phaseout for those in the highest tax bracket leading to a maximum 35% tax savings.

 ·        Unreimbursed job expenses of educators are deductible as itemized deductions.  This is in addition to the education tax deduction which is not an itemized deduction.