Anna's Deep Dives

_{Just facts, you think for yourself}

On July 4, 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed into law.

The headlines screamed one word: Relief.

"The 37% top rate is safe." "The corporate rate stays flat." "The 2017 cuts are permanent."

You probably breathed a sigh of relief. I did too.

But while everyone was celebrating the "stability," they missed the fine print.

We call it the "Invisible Revolution."

Last week, in Part 1 of our deep dive, we exposed the 7 hidden structural shifts in the new law. [Read Last Week’s Deep Dive: The 7 Hidden Changes Under OBBA ]

Today, in Part 2, we are getting specific. We are zooming in on exactly how these changes hit your wallet if you earn over $400k.

Because here is the dirty little secret they didn't tell you:

While the statutory rate stayed at 37%, the effective marginal rate for some of you just quietly spiked to over 50%.

If you earn between $500,000 and $600,000, you are now in a "kill zone" where every dollar you earn is taxed harder than a billionaire's.

We just finished a massive breakdown of this new reality. We call it "The 2026 Reality Check."

Here is what we found.

The "Nothing Changed" Myth Everyone thinks the new bill kept taxes flat. It didn't. They kept the rates nice and pretty, but they changed the definition of "taxable income" underneath your feet. It’s an optical illusion designed to make you feel safe while you write a bigger check. [Read Section 1: Introduction & The Structural Shift]

The "SALT Torpedo" (This one hurts) On paper, the SALT deduction cap went up to $40,000. Sounds great, right? Wrong. There is a hidden mechanism that claws it back. If you earn between $500,000 and $600,000, you hit what we call the "SALT Torpedo." Your marginal tax rate in this zone isn't 37%. It spikes to nearly 50% (and over 60% in high-tax states). [Dive into Section 2: SALT 2.0 and the Hidden Traps]

The Business Owner’s Cliff If you own a business, you love the 20% QBI deduction. You probably think it's safe now that it's "permanent." It’s not. The new law locks in a "cliff." If you earn one dollar over the limit, you don't just lose a little deduction. You lose the whole thing. That single dollar could cost you $10,000 in taxes. [Uncover Section 3: The QBI Deduction Danger]

The "Shadow Tax" This is the sneakiest part. Starting in 2026, if you are in the 37% bracket, your deductions are only worth 35 cents on the dollar. You pay tax at 37%. You deduct at 35%. The government pockets the difference. It’s a silent tax on your mortgage, your state taxes, and your charity. [Explore Section 4: The 35¢ Problem]

The Winners and Losers (It’s not who you think) Here is the wildest part. If you live in New York and make $400k, you actually win. You get a tax cut. But if you are ultra-wealthy and moved to Florida to save money? You might actually be the loser in this new deal. [See Section 6: Hidden Winners & Losers]

The New Map (Forget what you know) Old rule: "What's my tax bracket?" New rule: "Where is my cliff?" We map out the new terrain where "AGI Positioning" is more powerful than any deduction. If you are still playing by the 2017 rules, you are walking blind into a minefield. [Read Section 7: The New Map]

The "Lifestyle" Deductions (And the trap) Tips. Overtime. Car loans. Suddenly, these are tax shelters. But only if you know the limits. We break down the new "lifestyle" deductions that can lower your AGI—and the specific income levels where they vanish into thin air. [Read Section 8: Additional Topics & New Deductions]

This isn't just about paying taxes. It's about knowing the rules of the new game.

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Table of Contents

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

Section 1: The Myth of “Nothing Changes in 2026”

• 1.1 Introduction: Headlines vs. Reality

• 1.2 The Structural Shift: From Rate-Based to Base-Based Taxation

• 1.3 Hidden Mechanics and Volatility Drivers

  • The "SALT Torpedo" and Phase-Out Curves

  • The Qualified Business Income (QBI) Cliff

  • The "35¢ Problem": A New Deduction Penalty

  • AGI-Sensitive Traps and Charitable Hurdles

• 1.4 The Volatility Reality: A Case Example

• 1.5 Additional Structural Changes

  • Estate and Gift Tax Exemptions

  • Alternative Minimum Tax (AMT)

  • Family Benefits (Child Credits, Education)

  • Business Expensing (Bonus Depreciation, R&D)

Section 2: SALT 2.0: The Mirage of Relief and the Hidden Traps

• 2.1 What SALT 2.0 Actually Is

  • The Cap ($40k), The Trigger ($500k), and The Clawback (30%)

• 2.2 Who Benefits Most (The Winners)

  • Group A: The "Sweet Spot" ($250k–$500k in High-Tax States)

  • Group B: Dual-Income Couples with High Property Taxes

  • Group C: Business Owners Using the "SALT Stack" (PTET)

• 2.3 Who Loses Despite the Higher Cap

  • The "Donut Hole" Victims ($500k–$600k)

  • Top-Bracket Filers (The Mirage)

• 2.4 The Counterintuitive Insight: The "Shadow Tax" Trap

Section 3: The QBI Deduction: Permanent but Dangerous

• 3.1 The “QBI Is Safe” Myth

  • Expanded Phase-In Ranges

  • The Minimum Deduction ($400)

• 3.2 The New QBI Geography (Income Cliffs)

  • The 2026 Thresholds & The Cliff Dynamic

• 3.3 Who Is Most at Risk Post-OBBBA

  • Specialists, Consultants, and High-Margin S-Corp Owners

  • Medical/Dental Professionals & Creators

• 3.4 The “Dumb CPA Mistake” Everyone Will Make

  • The Linear Fallacy

  • Ignoring W-2 and UBIA Planning

Section 4: The New “Deduction Penalty” (The 35¢ Problem)

• 4.1 What the Deduction Penalty Is

  • The "2/37" Reduction & "Phantom AGI" Effect

• 4.2 Why This Hits High Earners Hardest

  • The Double Hit on Charitable Giving

  • Mortgage Interest & SALT Devaluation

• 4.3 The Counterintuitive Takeaway

  • Headline vs. Hidden News

  • The New Cost of Philanthropy

Section 5: The 2026 Filing Behavior Shift

• 5.1 More People Will Itemize – But Not Benefit Much

  • The Standard Deduction Hurdle vs. The Illusion of Deductions

• 5.2 SALT + QBI + Deduction Penalty = The New AGI Game

  • Strategic Zones: Sweet Spot, Danger Zone, The Gap, Top Zone

• 5.3 The Psychological Trap: "Wins that Feel Like Losses"

Section 6: Hidden Winners & Hidden Losers

• 6.1 Hidden Winners

  • High-Tax State Residents ($250k–$500k)

  • "Triple Crown" Business Owners (PTET + QBI + SALT)

  • Couples with Staggered Incomes

  • Front-Loaded DAF Users & Retirees Timing RMDs

• 6.2 Hidden Losers

  • High Earners in No-Income-Tax States (FL/TX/TN)

  • Top-Bracket Filers (35¢ Penalty Victims)

  • SSTB Professionals at the "Cliff"

  • Homeowners with Large Mortgages in High-Tax ZIPs

• 6.3 Surprising Case Studies

  • The Geography Paradox (California vs. Florida)

  • The Consultant's Cliff (QBI Loss)

  • The Physician Couple's AGI Spike

Section 7: “The New Map”: Your 2026 Tax Reality Reframed

• 7.1 The “Old Map” vs. “New Map” Mental Model

  • The Six Layers of the New Map

• 7.2 Why 2026–2028 Is the New Planning Window

  • AGI Smoothing & The SALT "Bell Curve"

  • Charitable Arbitrage & "Bunching"

  • QBI and Entity Engineering

  • State-Level Optimization

Section 8: Additional Topics

• 8.1 Tips Deduction (2025–2028)

• 8.2 Overtime Deduction (2025–2028)

• 8.3 Auto Loan Interest Deduction (2025–2028)

• 8.4 Senior Bonus Deduction (2025–2028)

• 8.5 Child and Dependent Care Credit Expansion

• 8.6 Business Provisions (Bonus Depreciation, QSBS, Opportunity Zones)

Baked with love,

Anna Eisenberg ❤️