A higher SALT cap, no tax on tips and overtime, and a new $6,000 senior deduction reshape 2026 planning. The Illinois CPA Society shares five moves taxpayers should make now.

CHICAGO, May 11, 2026 – Tax Day has come and gone, but that doesn’t mean your taxes shouldn’t stay top of mind. This year’s tax season was the first to fall under H.R. 1, the One Big Beautiful Bill Act (OBBBA), the sweeping tax legislation signed in July 2025. The law makes lower individual tax rates permanent, raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 through 2029, and introduces temporary deductions for tips, overtime, seniors, and qualifying auto loan interest. With these changes already affecting 2025 tax returns, the Illinois CPA Society recommends taxpayers act now to align their 2026 tax planning with the act’s provisions.

BY THE NUMBERS: 2026 Tax Planning Under OBBBA

• $40,000 - New SALT deduction cap through 2029, up from $10,000.
• $25,000 - Maximum “no tax on tips” deduction for eligible workers (2025-2028).
• $20,000/200 transactions - 1099-K reporting threshold permanently restored.
• $12,500 - Maximum “no tax on overtime” deduction for eligible workers (2025-2028).
• $10,000 - Maximum auto loan interest deduction on qualifying personal-use vehicles (2025-2028).
• $6,000 - New bonus deduction for taxpayers age 65 and older (2025-2028).
• $2,200 - Increased child tax credit per qualifying child.

If you faced a steep tax bill or received an unexpectedly large tax refund after filing your 2025 tax returns, here are five steps to take to optimize your taxes now to gain the biggest benefit before Tax Day next year.

1. Review your 2025 tax return. The answer to why you received a refund or had to pay a tax bill is in your tax return. Maybe certain OBBBA provisions impacted you. Maybe you received a bonus or raise that bumped you into a higher tax bracket. Maybe a major life event, like getting married or divorced, having a child, or purchasing a home, among other things, impacted your tax situation and the credits and deductions you’re entitled to. Or maybe you’re one of the millions of Americans with a side hustle that generated taxable 1099 income. Whatever the case may be, schedule time to look through your federal and state tax return documents to account for what’s changed for you and whether those changes will continue to impact your tax position for the remainder of the year ahead and beyond.

    

2. Check your withholdings. To avoid surprises at tax time, adjusting your W-4 payroll withholdings is one of the easiest ways to ensure you’re paying the right amount of income tax throughout the year, aiming for little to no refund or balance due come Tax Day. Common triggers for an update include a new job or major income shift, a change in filing status due to marriage, divorce, or welcoming a new child or dependent. Taxpayers can use the IRS’ free withholding estimator to help determine if making any changes to your W-4 is beneficial or necessary. The IRS recently updated its withholding estimator to reflect OBBBA changes, so revisiting your W-4 is especially worthwhile this year.

    

3. Mind your non-employee income. If you perform freelance or contract work, or if you sell items via eBay, Etsy, Venmo, or other online marketplaces, you’re likely to receive a 1099 form reporting this income at the end of the year. If this non-employee compensation grows to notable levels throughout the year, making estimated tax payments is typically required in real time—not just at year-end—to avoid a large tax bill due by Tax Day. Also beware, if your payroll withholdings or estimated tax payments aren’t enough, you may also be subject to an underpayment penalty come tax time. Two important updates: OBBBA permanently restored the 1099-K reporting threshold to $20,000 and 200 transactions, so casual sellers may not receive a form, but income from goods or services remains taxable whether or not a 1099-K is issued. The same law also created new deductions for qualifying tipped workers (up to $25,000) and hourly workers receiving overtime pay (up to $12,500) through 2028, both subject to income phaseouts. Workers in these categories should review whether they qualify before adjusting estimated payments.

    

4. Revisit your investments. Do you contribute to a tax-deferred retirement account via payroll deductions? Are you actively trading stocks on a regular basis? Did you inherit a large sum of money that’s now earning substantial interest in a high-yield savings account? Or do you hold mutual funds that pay out capital gain distributions near year-end? Each of these personal finance situations, among others, can affect your tax exposure in ways that may not be obvious at first glance. Understanding where your money is currently held (taxable or tax-deferred accounts), how it grows, and what type of income it generates is essential to making tax-savvy investment decisions, repositioning your investments for tax efficiency, and avoiding an unexpected tax burden. The SALT cap increase from $10,000 to $40,000 (through 2029, with phaseouts above $500,000 of modified adjusted gross income) is particularly significant for homeowners and high earners. The change may shift the itemize-versus-standard-deduction calculation for thousands of taxpayers, making it worth a fresh look at charitable giving, mortgage interest, and other itemized deduction strategies.

    

5. Start planning for 2026 now. Proactive tax planning isn’t just about avoiding surprises, it’s about positioning yourself to take advantage of tax-saving opportunities throughout the year and keeping as much of your money in your pocket as possible. Whether it’s increasing retirement contributions, planning tax-deductible charitable giving, adjusting withholdings for the tax impacts of life changes, or any number of strategies unique to you, starting now gives you time to better your tax position before the end of the tax year. This is especially true given that several of OBBBA’s most impactful provisions, including the deductions for tips, overtime, seniors, and auto loan interest are temporary and currently set to expire after 2028. Acting in 2026 maximizes the window to benefit from these new tax breaks while they remain available.

Tax planning can be complicated, but it’s critical to your financial success. Whenever you have questions or concerns about your tax situation, know that a CPA—a certified public accountant—can provide clarity. Working with a CPA isn’t just about filing a return, it’s about building a proactive tax strategy and financial plan. ICPAS’ free “Find a CPA” directory can help you find the trusted, strategic advisor that’s right for you based on location, types of services needed, and languages spoken. Find a CPA at www.icpas.org/findacpa.