2026 US Federal Tax Law Changes: What Texas Businesses Need to Know

The One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, brings sweeping changes to federal tax law for 2026 and beyond. For Texas businesses with 10-200 employees, understanding these shifts is critical to optimizing your tax strategy and maximizing savings.

Key Changes from the OBBBA for 2026

1. Permanent TCJA Elements

The Tax Cuts and Jobs Act (TCJA) provisions, which were set to expire, are now permanent. This includes:

• Lowered tax rates across all income brackets
• Higher standard deduction: $32,200 for married couples filing jointly in 2026
• Enhanced child tax credits and dependent deductions

2. New Deductions for Tips and Overtime (2026-2028)

For Texas restaurants, hospitality businesses, and service industries, this is huge. Qualified tips and overtime income are now deductible through 2028, offering immediate relief for employers and employees alike.

Example: A Houston restaurant with 25 employees could save $15,000-$30,000 annually by leveraging these deductions. Pair this with TWPS's corporate structuring and tax strategies to maximize your savings.

3. Car Loan Interest Deduction

Businesses and individuals can now deduct car loan interest, providing relief for Texas SMBs with vehicle fleets or owners financing business vehicles. This is especially valuable for delivery services, construction firms, and field service companies.

4. Expanded SALT Deduction

The state and local tax (SALT) deduction cap has been raised, allowing Texas businesses to deduct more in state property taxes and other local fees. While Texas has no state income tax, this still benefits SMBs with significant property holdings or multi-location operations.

What to Expect Beyond 2026

Beyond 2026, expect ongoing inflation adjustments to standard deductions, brackets, and credits. The IRS will also issue regulatory guidance on implementing OBBBA provisions, so staying compliant is critical.

Additionally, watch for potential regulatory tweaks to qualified tip and overtime deductions after 2028. TWPS will monitor these changes and update your tax strategy accordingly.

How TWPS Can Optimize Your 2026 Tax Strategy

At TWPS, our corporate structuring and tax strategies are designed to help Texas businesses leverage every available deduction and credit. Our services include:

• Entity review and optimization (LLC/S-Corp/C-Corp)
• Tax-efficient compensation plan design
• Key person life & disability insurance
• 105, 125, and 162 bonus plan implementation
• 412(e)(3) pension-style plans
• Buy-sell structures and executive carve-outs

Starting at just $1,500, our one-time audit can identify thousands in savings for your Texas SMB. Schedule your free consultation to see how we can help you navigate the 2026 tax landscape.