March 9, 2026

Key Provisions of the One Big Beautiful Bill Act for 2026: What Individuals and Businesses Need to Know

Key Provisions of the One Big Beautiful Bill Act for 20

As we move into the 2026 tax year, several important changes to deductions are taking effect under the One Big Beautiful Bill Act (OBBBA). These updates affect both individuals and businesses and may require proactive planning to avoid surprises.

Below, we break down five major areas that could impact your 2026 tax strategy.

Changes Impacting Individuals

  • Charitable giving remains an important tax planning tool, but the rules have been modified.

o Itemizers face a new floor that applies to charitable deductions, meaning contributions must exceed 0.5% of adjusted gross income (AGI) before they become deductible.

o Non-itemizers have a new opportunity to claim a charitable deduction for qualified donations of up to $1,000 for single filers and $2,000 for married filing joint returns.

·Qualified donations include cash, check or electronic payments made directly to public charities.

·Non-qualified donations include donations of property, donations to donor advised funds, or to private foundations.

  • Expanded definition of qualified educators for the new itemized deduction on Schedule A.

o K–12 teachers, instructors, counselors, principals, aides, sports coaches and sports administrators are included.

o K-12 teachers, instructors, counselors, principals, and aides are still eligible for the $300 above the line deduction.

  • Enhancements to 529 college savings plan rules provide families with increased flexibility in education planning.

o Expanded definitions of qualified education expenses including:

· Tutoring services

· Standardized testing fees

· Dual-enrollment program expenses

· Educational therapies for students with disabilities

o Increased allowable distributions for K–12 education.

Changes Impacting Business

  • One of the most impactful business changes in 2026 is the elimination of the deduction for many employer-provided meals.

o Beginning in 2026, businesses generally can no longer deduct the cost of meals provided to employees, including:

· Meals provided for the employer’s convenience

· Routine office snacks and food programs

· On-site cafeterias

o Previously, these expenses were often 50% deductible (and in some cases fully deductible). Under the new law, most of these costs are no longer deductible at all in most industries.

  • Corporate charitable giving remains deductible, but new limitations may affect how much benefit corporations can claim.

o A new floor applies that applies to charitable deductions, meaning contributions must exceed 1.0% of the charitable contribution base, while the 10.0% ceiling remains.

o Excess contributions may still be carried forward with revised rules around the new floor.

The 2026 changes introduce meaningful shifts for both individuals and businesses. While some provisions create new opportunities, others reduce long-standing deductions.

If you would like to review how these changes affect your personal or business tax situation, contact our team at Welgaard to help you develop a strategy that aligns with your financial goals.