Anna's Deep Dives

_{Just facts, you think for yourself}

I only want to be in your inbox if you truly find value here. If you'd prefer to stop receiving these emails, you can unsubscribe instantly below.

You’ve probably heard the buzz about the 2026 tax changes.

The headlines look promising. The standard deduction is hitting a massive $32,200. The SALT cap is finally quadrupling to $40,000. And the tax rates we’ve gotten used to are becoming permanent.

On paper, it looks like a win.

But here is the stat they aren't telling you: 61% of taxpayers have already stopped itemizing, and that number is about to climb. Why? Because hidden in the fine print is a new "45.5% bubble bracket" that punishes you for succeeding.

It’s what we call the "New Deduction Economy." The goal? To quietly shrink the value of every dollar you write off—sometimes to zero.

We went deep into the 1,000+ page overhaul so you don't have to.

Here is the unvarnished truth about your taxes in 2026.

The Illusion: Why "More" is Actually Less Everyone talks about the higher standard deduction like it's a gift. It’s actually a hurdle. For a family earning $250k, the new bar is so high that your mortgage interest and property taxes might not count for anything anymore. We explain why the "mass affluent" are getting squeezed out of itemizing entirely. [Read Section 1: The Illusion of More Deductions]

The "Phantom Tax": The 35-Cent Penalty This is the nastiest surprise in the bill. If you are in the top bracket, the government has decided to stop subsidizing your deductions fully. You pay 37 cents of tax on every dollar you earn, but you only save 35 cents on every dollar you deduct. It’s a math gap that costs you thousands. [Dive into Section 2: The “35¢ on the Dollar” Penalty]

The Housing Matrix: Is Your Mortgage Now "Bad Debt"? For decades, carrying a mortgage was smart tax planning. That era is over. With the deduction permanently capped at $750,000 debt, and the new penalty kicking in, the after-tax cost of your home loan just went up. We run the numbers on whether you should be paying off that mortgage aggressively. [Uncover Section 3: The Housing and Debt Matrix]

The Charity Floor: Why Small Gifts Don't Count Used to writing a $1,000 check to your alma mater? The IRS won't care in 2026. There is a new 0.5% AGI floor. That means your first few thousand dollars of giving get zero tax benefit. We explain why "bunching" your donations into one year is the only way to beat the system. [Explore Section 4: The Philanthropic Landscape]

The SALT Trap: The $40,000 Tease They raised the State and Local Tax (SALT) cap from $10,000 to $40,000. Great news for New York and California, right? Not exactly. There is a trap door. Once your income hits $500,000, that deduction starts disappearing. We show you the "Bubble Bracket" where your marginal tax rate effectively hits 45%. [See Section 5: The SALT Wars and State-Level Analysis]

The "Fictional Income" Tax & The End of Free Lunch Think the new laws only hit the big stuff? Think again. There’s a new rule that taxes gamblers on money they didn't even keep (we call it "fictional income"). And for the corporate crowd, the era of the fully deductible business lunch is officially dead. But it’s not all bad news—service workers just got a massive break on tips. [Discover Section 6: Niche Provisions & Lifestyle Changes]

The Verdict: Should You Even Itemize? The old rules don't apply. We built a new hierarchy to help you decide if you should stick with the standard deduction or fight for itemization. Spoiler: The people in the middle-upper income range might have it the hardest. [Read Section 7: The New Itemization Hierarchy]

The New Playbook: 4 Questions You Must Ask We’re throwing out the old tax checklist. In 2026, high-net-worth families need a completely new mental model. We map out the four critical decisions you need to make right now—from rethinking your mortgage to timing your income—to survive the new deduction economy. [See Section 8: The 2026 Deduction Map]

This isn't just about filing forms. It's about rethinking how you spend, give, and borrow money for the next decade.

Get the full breakdown.

In a world full of noise and spin, we stay focused on facts. No hype, no hidden motives — just honest reporting.
Become a paid subscriber today and help protect journalism that still believes truth matters.

Table of Contents

^{(Click on any section to start reading it)}

1. The New Deduction Economy: Why 2026 Is Not What It Seems

• 1.1 The Illusion of “More Deductions in 2026”

  • 1.1.1 The New Standard Baseline

  • 1.1.2 SALT cap increase does not guarantee larger deductions

  • 1.1.3 Misunderstood deductions: mortgage interest and charitable giving

  • 1.1.4 Hidden rules shrink the value of itemizing

• 1.2 Standard vs. Itemized: Setting the Frame

• 1.3 The Philosophy of Permanence and the "Pay-Fors"

2. The “35¢ on the Dollar” Penalty: The "Phantom Tax" on Deductions

• 2.1 The Mechanism: The "2/37ths Rule"

• 2.2 Economic Implication: Closing the Arbitrage

• 2.3 Scenario Analysis and Case Studies

  • 2.3.1 The High-Net-Worth Scenario ($500k Deduction)

  • 2.3.2 Mortgage-interest example

  • 2.3.3 SALT example

• 2.4 Why This Is Functionally a “Hidden Tax Increase”

  • 2.4.1 Marginal benefit reduction across deduction categories

  • 2.4.2 Disproportionate impact on high earners

  • 2.4.3 Big giving years and donor advised funds

3. The Housing and Debt Matrix

• 3.1 Mortgage Interest Permanence: The $750,000 Ceiling

  • 3.1.1 Case studies: California vs. Texas

• 3.2 The "Good Debt" vs. "Bad Debt" Calculation

  • 3.2.1 Payoff considerations: when does accelerating payoff make sense?

• 3.3 PMI Deductibility: A Win for the Entry Level

• 3.4 Home equity lines of credit (HELOCs) and second homes

• 3.5 Investment Property vs. Primary Residence Interest

• 3.6 The Green Energy "Sunset"

• 3.7 Real Estate: The Opportunity Zone "Dead Zone"

4. The Philanthropic Landscape (2026)

• 4.1 The 0.5% AGI Floor: The "Dead Zone" of Giving

• 4.2 The "Non-Itemizer" Deduction vs. The DAF Exclusion

• 4.3 The "Bunching" Imperative: Strategic Philanthropy

• 4.4 Corporate Philanthropy: The 1% Floor

• 4.5 Leveraging Non-Cash Assets and Advanced Vehicles

• 4.6 The Psychological Trap

  • 4.6.1 Misconceptions about deductibility

  • 4.6.2 Shifting to smarter philanthropy

5. The SALT Wars and State-Level Analysis

• 5.1 The $40,000 Cap and the "Tease"

• 5.2 The Phaseout Trap ($500k Cliff)

• 5.3 The PTET Salvation: Deep Dive

  • 5.3.1 California (SB 132 Extension)

  • 5.3.2 New Jersey (BAIT)

  • 5.3.3 New York (PTET)

• 5.4 The AMT Collision

• 5.5 When SALT Still Creates Wins

  • 5.5.1 Dual‑income households in high‑tax states

  • 5.5.2 Property owners with very high property taxes

  • 5.5.3 Business owners leveraging PTET + SALT

  • 5.5.4 Married filing jointly with staggered incomes

• 5.6 Case Studies: SALT Deduction Strategies in Practice

6. Niche Provisions and The New Lifestyle

• 6.1 The "No Tax on Tips" Deduction

• 6.2 Gambling Loss Restrictions: The "Fictional Income" Tax

• 6.3 Meal Expense Disallowance

• 6.4 Senior Deductions: The Graying of the Code

7. The New Itemization Hierarchy: Who Should Not Itemize Anymore

• 7.1 When the Standard Deduction Beats Itemization

• 7.2 When Itemization Still Makes Sense

• 7.3 The Surprising “Middle Is Worst” Finding

8. The 2026 Deduction Map: What Wealthy Families Must Rethink

• 8.1 The Four New Questions Every High‑Net‑Worth Household Must Ask

• 8.2 The “New Deduction Economy” Mental Model

  • 8.2.1 Shifting from “amount spent” to “deduction effectiveness”

  • 8.2.2 Recognizing diminishing marginal utility of deductions

  • 8.2.3 Integrating tax planning with broader financial planning

Baked with love,

Anna Eisenberg ❤️