Main Line: 479.443.2705
Fax Line: 479.443.2718
Email: info@rmp.law
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
Main Line: 479.443.2705
Fax Line: 479.443.2718
Email: info@rmp.law
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
Federal tax law changes for 2026 could impact your deductions and tax planning strategy. Understand what’s changing and how to prepare.
On Tuesday, the Federal Trade Commission issued a new Rule putting an end to employment-related non-compete clauses. In its justification for the rule, the FTC called non-compete clauses “an unfair method of competition” and stated it is a “violation for [employers] to… enter into non-compete clauses (“non-competes”) with workers.” In today’s very competitive labor market, the new FTC Rule creates a significant disruption for employers.
This new FTC provision—set to take effect in 120 days—renders existing non-compete agreements unenforceable. Existing non-compete agreements with senior executives will remain enforceable, although employers cannot require newly hired senior executives to sign such an agreement.
After the Rule takes effect, employers are required to deliver personal notice to employees (past and present) who signed a non-compete agreement informing them agreements are no longer enforceable. In the notice, employers must inform employees they are free to accept any job or start any business, even if it is directly competitive with the employer.
Compliance with the FTC Rule is not optional. Employers should consider new ways they can protect against a former employee gaining a competitive advantage by using the employer- provided training, the relationships made possible by the employer, or the confidential information learned from the employer. RMP can assist you in navigating this disruption and can provide advice on how to most effectively protect your vital business interests going forward.
RMP Attorneys At Law has an experienced Employment Law Attorney team dedicated to helping you navigate these changes. If you have any questions or would like guidance, reach out to one of our employment attorneys, Tim Hutchinson, Seth Haines, Larry McCredy, or Taylor Baltz or call 479.443.2705.
As you may be aware, federal tax law changes can have a significant ripple effect on household finances, charitable giving, retirement planning, and other important decisions made throughout a tax year. As taxpayers plan for the 2026 tax year (for which a tax return will be filed in 2027), several federal changes and scheduled adjustments are worth understanding now.
Important reminder: Federal tax law is primarily governed by the Internal Revenue Code (IRC) and impacted by, or at least informed by, regulations and guidance issued by the IRS. The IRC is subject to change by congressional action–the most recent example of such action is the One Big Beautiful Bill Act (OBBBA), which was enacted on July 4, 2025. Additionally, Treasury regulations and guidance may change over time as well. Taxpayers should always review the IRC and relevant IRS guidance at the time of filing to ensure they comply with current law.
The Tax Cuts and Jobs Act (TCJA), enacted in 2017, marked a significant increase in the standard deduction available to taxpayers and a corresponding decrease in the appeal of itemizing. The OBBBA continued this trend with an additional increase in the standard deduction. The IRS has already released inflation-adjusted federal standard deduction amounts for tax year 2026, which represent a modest increase from 2025:
The continuation of such a significant standard deduction should continue to reduce the number of taxpayers who benefit from itemizing deductions, particularly those with moderate mortgage interest or charitable contributions.
Why this matters:
Taxpayers who traditionally itemized prior to the TCJA should continue to evaluate whether the itemizing is justified in light of the large standard deduction which continues to be available. Additionally, if the decision to itemize or take the standard deduction is expected to be a close call in any year, taxpayers may want to revisit certain tax planning strategies, such as “bunching” charitable contributions into a single year, to exceed the standard deduction threshold.
The OBBBA introduced a new provision which allows certain taxpayers age 65 and older to claim an additional standard deduction of up to $6,000 per eligible individual, subject to income phase-outs.
Key features:
Why this matters:
For older taxpayers, this temporary deduction may significantly reduce taxable income even if they do not itemize.
Families often need to protect benefits for a loved one with a disability. A special needs trust allows The federal deduction for state and local taxes (SALT) remains capped, but the cap has been increased to $40,400 ($20,200 for married individuals filing separately) in 2026, subject to an income phase-out commencing when a taxpayer’s modified gross income exceeds $505,000. Interestingly, the SALT deduction incorporates its own sort of “marriage penalty” by applying a uniform limit across all filers.
This phase out may cause the SALT deduction for certain high-income taxpayers to be once again limited to $10,000.This increase, even if available to a taxpayer, is temporary, as the cap is scheduled to revert to $10,000 in 2030.
Why this matters:
Taxpayers in higher-tax states or higher-income taxpayers may continue to feel constrained by the SALT cap, making other deductions and credits more important for overall tax efficiency.
LThe OBBBA revived a prior deduction available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act which allowed taxpayers taking the standard deduction to take an additional deduction for cash contributions made to certain charitable organizations. Beginning in 2026, this provides taxpayers the opportunity to deduct an additional $1,000 ($2,000 if married filing jointly).
Why this matters:
With higher standard deductions, as discussed above, and in light of the changes OBBBA introduced with respect to charitable deductions, taxpayers should carefully plan their charitable contributions to maximize the tax advantages of the related deduction.
Main RMP Number: 479-443-2705
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
Federal retirement contribution limits (401(k), IRA, catch-up contributions) continue to be inflation-indexed.. For 2026, the IRS announced the annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans and Thrift Savings Plans is increased to $24,500. The 2026 annual contribution limit to an IRA is increased to $7,500. Other applicable limits are discussed in the IRS news release and in more detail in IRS Notice 2025-67.
Catch-up contributions remain especially valuable for taxpayers who are age 50 or older, and under Secure 2.0, increased catch-up contributions are available for individuals between ages 60 and 63. Roth vs. traditional contribution decisions, and the related question of conversion, remain critical in higher-income years and the larger context of a taxpayer’s tax situation.
Why this matters:
Changes in contribution limits affect both current-year deductions and long-term tax planning, particularly for taxpayers approaching retirement.
While the OBBBA addressed much of the increasing uncertainty surrounding expiring TCJA provisions, it also holds a number of provisions that are set to roll out or expire over time. In other words, changes to the tax law are still forthcoming, and as for those provisions that are said to be permanent, only time will tell.
Additionally, following the passage of the OBBBA, there remain some unanswered questions surrounding implementation at the federal level as well as resulting state tax law changes or interaction with the Act. Taxpayers should look closely for Treasury guidance and state tax law to fully appreciate the impact of the OBBBA.
Why this matters:
The mutable nature of federal tax law aside, the OBBBA provided some much appreciated clarity for taxpayers as we head into 2026, and in many instances, tax planning can now be carried out with more confidence. However, as with any new tax law, the OBBBA brings its own special brand of uncertainty that must now be addressed.
Benjamin Franklin once wrote, “in this world, nothing is certain except death and taxes.” His point rings true in a sense, but given the significant changes we have seen to federal tax law even just recently in the OBBBA, certainty is not a word that likely comes to mind for many when thinking about tax law. Still, it is important for taxpayers—especially retirees, charitable donors, and households near the itemizing threshold—to understand how federal and state tax law changes affect them heading into 2026 and to let this knowledge inform their planning decisions in the upcoming year. Failing to understand these changes may lead to realizations of lost tax-savings opportunities and other unfortunate surprises come April 2027, when filing tax returns for the 2026 tax year.
Tax law changes create both risk and opportunity. If you want help understanding how the 2026 federal tax changes may affect your estate plan, charitable giving, or retirement strategy, RMP Law can help. Call 479-443-2705 or send us a message to schedule a consultation.
Main RMP Number: 479-443-2705
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
DISCLAIMER: The information provided on this website does not constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.
As you may be aware, federal tax law changes can have a significant ripple effect on household finances, charitable giving, retirement planning, and other important decisions made throughout a tax year. As taxpayers plan for the 2026 tax year (for which a tax return will be filed in 2027), several federal changes and scheduled adjustments are worth understanding now.
Important reminder: Federal tax law is primarily governed by the Internal Revenue Code (IRC) and impacted by, or at least informed by, regulations and guidance issued by the IRS. The IRC is subject to change by congressional action–the most recent example of such action is the One Big Beautiful Bill Act (OBBBA), which was enacted on July 4, 2025. Additionally, Treasury regulations and guidance may change over time as well. Taxpayers should always review the IRC and relevant IRS guidance at the time of filing to ensure they comply with current law.
The Tax Cuts and Jobs Act (TCJA), enacted in 2017, marked a significant increase in the standard deduction available to taxpayers and a corresponding decrease in the appeal of itemizing. The OBBBA continued this trend with an additional increase in the standard deduction. The IRS has already released inflation-adjusted federal standard deduction amounts for tax year 2026, which represent a modest increase from 2025:
The continuation of such a significant standard deduction should continue to reduce the number of taxpayers who benefit from itemizing deductions, particularly those with moderate mortgage interest or charitable contributions.
Why this matters:
Taxpayers who traditionally itemized prior to the TCJA should continue to evaluate whether the itemizing is justified in light of the large standard deduction which continues to be available. Additionally, if the decision to itemize or take the standard deduction is expected to be a close call in any year, taxpayers may want to revisit certain tax planning strategies, such as “bunching” charitable contributions into a single year, to exceed the standard deduction threshold.
The OBBBA introduced a new provision which allows certain taxpayers age 65 and older to claim an additional standard deduction of up to $6,000 per eligible individual, subject to income phase-outs.
Key features:
Why this matters:
For older taxpayers, this temporary deduction may significantly reduce taxable income even if they do not itemize.
Families often need to protect benefits for a loved one with a disability. A special needs trust allows The federal deduction for state and local taxes (SALT) remains capped, but the cap has been increased to $40,400 ($20,200 for married individuals filing separately) in 2026, subject to an income phase-out commencing when a taxpayer’s modified gross income exceeds $505,000. Interestingly, the SALT deduction incorporates its own sort of “marriage penalty” by applying a uniform limit across all filers.
This phase out may cause the SALT deduction for certain high-income taxpayers to be once again limited to $10,000.This increase, even if available to a taxpayer, is temporary, as the cap is scheduled to revert to $10,000 in 2030.
Why this matters:
Taxpayers in higher-tax states or higher-income taxpayers may continue to feel constrained by the SALT cap, making other deductions and credits more important for overall tax efficiency.
LThe OBBBA revived a prior deduction available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act which allowed taxpayers taking the standard deduction to take an additional deduction for cash contributions made to certain charitable organizations. Beginning in 2026, this provides taxpayers the opportunity to deduct an additional $1,000 ($2,000 if married filing jointly).
Why this matters:
With higher standard deductions, as discussed above, and in light of the changes OBBBA introduced with respect to charitable deductions, taxpayers should carefully plan their charitable contributions to maximize the tax advantages of the related deduction.
Main RMP Number: 479-443-2705
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
Federal retirement contribution limits (401(k), IRA, catch-up contributions) continue to be inflation-indexed.. For 2026, the IRS announced the annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans and Thrift Savings Plans is increased to $24,500. The 2026 annual contribution limit to an IRA is increased to $7,500. Other applicable limits are discussed in the IRS news release and in more detail in IRS Notice 2025-67.
Catch-up contributions remain especially valuable for taxpayers who are age 50 or older, and under Secure 2.0, increased catch-up contributions are available for individuals between ages 60 and 63. Roth vs. traditional contribution decisions, and the related question of conversion, remain critical in higher-income years and the larger context of a taxpayer’s tax situation.
Why this matters:
Changes in contribution limits affect both current-year deductions and long-term tax planning, particularly for taxpayers approaching retirement.
While the OBBBA addressed much of the increasing uncertainty surrounding expiring TCJA provisions, it also holds a number of provisions that are set to roll out or expire over time. In other words, changes to the tax law are still forthcoming, and as for those provisions that are said to be permanent, only time will tell.
Additionally, following the passage of the OBBBA, there remain some unanswered questions surrounding implementation at the federal level as well as resulting state tax law changes or interaction with the Act. Taxpayers should look closely for Treasury guidance and state tax law to fully appreciate the impact of the OBBBA.
Why this matters:
The mutable nature of federal tax law aside, the OBBBA provided some much appreciated clarity for taxpayers as we head into 2026, and in many instances, tax planning can now be carried out with more confidence. However, as with any new tax law, the OBBBA brings its own special brand of uncertainty that must now be addressed.
Benjamin Franklin once wrote, “in this world, nothing is certain except death and taxes.” His point rings true in a sense, but given the significant changes we have seen to federal tax law even just recently in the OBBBA, certainty is not a word that likely comes to mind for many when thinking about tax law. Still, it is important for taxpayers—especially retirees, charitable donors, and households near the itemizing threshold—to understand how federal and state tax law changes affect them heading into 2026 and to let this knowledge inform their planning decisions in the upcoming year. Failing to understand these changes may lead to realizations of lost tax-savings opportunities and other unfortunate surprises come April 2027, when filing tax returns for the 2026 tax year.
Tax law changes create both risk and opportunity. If you want help understanding how the 2026 federal tax changes may affect your estate plan, charitable giving, or retirement strategy, RMP Law can help. Call 479-443-2705 or send us a message to schedule a consultation.
Main RMP Number: 479-443-2705
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
DISCLAIMER: The information provided on this website does not constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.
Main Line: 479.443.2705
Fax Line: 479.443.2718
Email: info@rmp.law
Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000
JOHNSON
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Springdale, AR 72762
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