After the One Big Beautiful Bill.
What the 2026 tax code actually looks like.
The One Big Beautiful Bill Act, signed July 4, 2025, made most TCJATax Cuts and Jobs Act (TCJA)The big 2017 federal tax law. It nearly doubled the no-questions-asked tax deduction everyone gets, limited the deduction for state and local taxes to $10,000, and cut corporate and individual tax rates. Most of the personal tax cuts expire at the end of 2025 unless Congress extends them.Full definition individual provisions permanent. The lower brackets stay. The higher standard deductionstandard deductionA fixed dollar amount that reduces your taxable income without itemizing. Most people claim this instead of listing individual deductions.Full definition stays. The QBIQualified Business Income (QBI)Income from a self-employed business or partnership that may qualify for a 20% tax deduction under current law.Full definition deduction stays. The elevated estate exemption stays. This page lays out the 2026 tax rules that now apply to most Americans, and what changed from the original TCJA timeline.
The TCJA was always temporary by design (a budget-rule artifact). Most individual provisions were scheduled to revert after December 31, 2025. Congress passed the One Big Beautiful Bill Act in July 2025, signed into law July 4, 2025. It made most of those temporary cuts permanent: lower brackets, the higher standard deduction (now $16,100 single, $32,200 MFJMarried Filing Jointly (MFJ)A tax filing status where a married couple combines their income and deductions on one tax return. for 2026), the QBI deduction for self-employed people, and the elevated estate and gift tax exemption ($15M single, $30M MFJ in 2026, indexed for inflationinflationA general increase in prices over time, meaning each dollar buys less than it did before.Full definition). A handful of new provisions are temporary, set to expire 2028 unless extended. Verify any specific number with the IRS before relying on it for filing.
Section 1 · What happened
The Tax Cuts and Jobs Act of 2017 (Public Law 115-97) was the largest overhaul of the US tax code in 30 years verify×DON'T TRUST, VERIFYClaim: TCJA was enacted as Public Law 115-97 on December 22, 2017.Verify at: congress.gov/bill/115th-congress/house-bill/1 ↗The bill text and final enacted version are on Congress.gov.. Most corporate provisions (including the 21% flat corporate rate) were permanent from day one. Most individual provisions were temporary, scheduled to expire after December 31, 2025. The expiration was a budget-rule artifact: making them permanent at the time would have exceeded reconciliation deficit limits.
Congress and the President reached an agreement before the cliff. The One Big Beautiful Bill Act was signed into law on July 4, 2025 verify×DON'T TRUST, VERIFYClaim: The One Big Beautiful Bill Act (OBBBA) was signed into law July 4, 2025 and made most TCJA individual provisions permanent.Verify at: congress.gov (search "One Big Beautiful Bill Act") ↗ · irs.gov ↗Public Law number and exact provisions are on Congress.gov; IRS published implementation guidance after enactment.. The political compromise locked in most of TCJA's individual provisions on a permanent basis and added several new (mostly temporary) deductions on top.
For most households, the practical effect is that the 2026 tax year looks like 2025 plus inflation adjustments, not the dramatic reversion that the pre-OBBBA scheduling implied.
Section 2 · What OBBBA made permanent
The TCJA bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) is now permanent. The 39.6% top rate that would have returned absent OBBBA is off the table. Brackets continue to be inflation-adjustedinflation-adjustedA dollar number redrawn after stripping out the effect of rising prices, so you can compare what the money actually bought across years. A $30,000 salary in 1985 was worth more in real life than a $50,000 salary today. each year. Verify the exact 2026 thresholds on the tax estimator or at irs.gov.
2026 standard deduction:
- Single filers: $16,100
- Married filing jointly: $32,200
Indexed for inflation going forward. The personal exemption (which TCJA eliminated) stays eliminated. Most filers continue to use the standard deduction rather than itemizing. verify×DON'T TRUST, VERIFYClaim: 2026 standard deduction is $16,100 single and $32,200 MFJ.Verify at: irs.gov inflation adjustment notices ↗The IRS publishes annual inflation-adjustment numbers (typically in fall for the upcoming year) in a Revenue Procedure. Numbers may shift slightly when finalized.
Up to 20% deduction on Qualified Business Income for self-employed people, sole proprietors, and pass-through business owners. Now permanent. Subject to income phase-outs and service-business limits. A business generating $150,000 in qualified income now keeps approximately $6,600/year in federal taxes from QBI alone (20% × $150k × 22% bracket) on a permanent basis. For S-Corp owners, the QBI deduction is part of the long-running break-even math; see LLC vs S-Corp: When the Tax Switch Pays Off.
2026 exemption: approximately $15 million per person, $30 million for married couples. Indexed for inflation going forward. verify×DON'T TRUST, VERIFYClaim: 2026 estate and gift tax exemption is approximately $15M per person ($30M MFJ).Verify at: irs.gov/estate-tax ↗The IRS publishes the annual exemption amount; verify the exact 2026 figure on the IRS page.
The earlier urgency to use the elevated exemption before 2026 has passed. The higher exemption stays. Estate planningestate planningOrganizing your assets and legal documents so they transfer correctly and efficiently when you die.Full definition conversations now focus on long-horizon strategy rather than racing a deadline. See Wills, Trusts, and Estate Planning Explained and Bitcoin Estate Planning: Inheritance Without Loss.
TCJA eliminated personal exemptions (the line that used to give you a deduction per dependent on top of the standard deduction). OBBBA kept that elimination. The Child Tax Credit and Other Dependent Credit do the work that personal exemptions used to do.
The cap on mortgage debt eligible for the home mortgage interest deduction (acquisition debt) stays at $750,000 ($375,000 if MFS). Pre-TCJA cap of $1 million does not return.
The TCJA suspension of unreimbursed employee expenses, investment-management fees, and tax-prep fees as itemized deductions is now permanent. These deductions do not return.
Section 3 · What is still temporary (set to expire 2028)
OBBBA added several new individual deductions on top of the permanent TCJA framework. Most of these are scheduled to expire after 2028 unless Congress extends them again. Verify the exact provisions and expiration dates with a CPA before relying on them. verify×DON'T TRUST, VERIFYClaim: OBBBA added new temporary individual deductions set to expire after 2028.Verify at: irs.gov OBBBA implementation guidance ↗ · congress.gov ↗Specific provisions, qualifying-income thresholds, and exact expiration dates are in the bill text and IRS guidance. Several were added during the legislative process; verify each one independently.
- Bonus deduction for individuals 65 and older. A new age-targeted addition to the standard deduction beyond the existing senior amount. Set to expire 2028.
- Car loan interest deduction. A limited deduction for personal auto loan interest, with caps and qualifying-vehicle requirements. Set to expire 2028.
- No tax on tip income. Tipped wages within defined limits are exempt from federal income tax for qualifying workers in covered occupations. Set to expire 2028.
- No tax on overtime income. Overtime premium pay (the half-time portion above regular pay) is exempt from federal income tax for qualifying workers. Set to expire 2028.
Each of these has eligibility rules, income phase-outs, or occupational definitions. Treat them as planning levers worth investigating with a CPA, not as automatic write-offs.
Section 4 · The 2026 numbers
The post-OBBBA 2026 tax year starts from the TCJA bracket structure plus inflation adjustments. The headline numbers most filers care about:
- Single: $16,100
- Married filing jointly: $32,200
- 401(k) employee: $24,500 (catch-up 50+: $8,000)
- IRAIndividual Retirement Account (IRA)A personal retirement savings account with tax advantages. Two main types: Traditional (tax now, pay later) and Roth (pay now, tax-free forever).Full definition: $7,500 (catch-up 50+: $1,100)
- HSAHealth Savings Account (HSA)A tax-advantaged account for healthcare costs, available with a high-deductible plan; contributions, growth, and qualified withdrawals are all tax-free.Full definition self-only: $4,400; family: $8,750
- Solo 401(k) total: $72,000
- Social Security wage base: $184,500
See Six Financial Numbers Every Adult Should Know for the full canonical list and Tax Estimator: W-2, Self-Employed, 50 States to model your own 2026 liability against actual brackets.
Section 5 · What this means for planning
Your tax brackets and rates are now stable rather than subject to annual political uncertainty. Multi-year planning (Roth conversions, capital-gains harvesting, charitable bunching) can use stable bracket projections rather than scenario-modeling expiration vs extension. Run your 2026 number against the new standard deduction in the tax estimator.
QBI is a permanent feature of the tax code now. The S-Corp election break-even math no longer has a 2025 cliff scenario; it stabilises around the QBI deduction at its current 20% level. See LLC vs S-Corp: When the Tax Switch Pays Off and Gig Worker Finance: Taxes, Retirement, Insurance.
No federal estate tax exposure. Planning shifts from "use the exemption before it drops" to long-horizon questions: stepped-up basisstepped-up basisA tax break for heirs. When you inherit a stock, house, or Bitcoin, the IRS pretends you bought it at its market value on the date the previous owner died. All the growth that happened during their lifetime escapes tax forever.Full definition, beneficiarybeneficiaryThe person or entity you name to receive an account or insurance policy when you die. designations, joint tenancy, and trust structure. See Wills, Trusts, and Estate Planning Explained.
The exemption is permanent and indexed, but the top federal estate-tax rate above the exemption (40%) remains. Lifetime gifting, GRATs, irrevocable trusts, and other estate-tax-mitigation tools still apply. The IRS no-clawback rule on prior gifts under the elevated TCJA exemption remains in effect. Consult an estate attorney.
The Child Tax Credit ($2,000 per qualifying child under TCJA) carries forward at OBBBA-confirmed levels. Verify the exact 2026 refundable portion and phase-out thresholds at irs.gov. Roth conversionRoth conversionMoving money from a tax-deferred retirement account (where you'll owe tax later) into a Roth account (where everything grows and comes out tax-free). You pay regular income tax this year on the amount moved.Full definition strategy no longer needs to race the bracket reset; it competes against the new permanent rate structure on its own merits. See Roth Conversions: Filling Low-Income Years.
The SALTState and Local Tax (SALT)The federal deduction for state income taxes, property taxes, and local taxes, currently capped at $10,000 per year.Full definition cap was modified by OBBBA. The exact post-OBBBA cap and any phase-out rules vary; verify the current cap with a CPA before assuming the prior $10,000 limit still applies. If your itemized total now exceeds the higher standard deduction, itemizing may again be the better choice.
- Public Law 115-97 (Tax Cuts and Jobs Act of 2017) · congress.gov.
- One Big Beautiful Bill Act (signed July 4, 2025) · congress.gov (search by full name for current text and Public Law number).
- IRS. Implementation guidance for OBBBA provisions · irs.gov.
- IRS. Annual inflation-adjustment Revenue Procedures (2026 figures) · irs.gov.
- IRS. Estate and gift tax page · irs.gov/businesses/small-businesses-self-employed/estate-tax.
- IRS. Final regulations confirming no clawback of TCJA-era gifts · irs.gov.
- IRS. Qualified Business Income Deduction · irs.gov.
- Tax Foundation. Pre-OBBBA TCJA expiration analysis (historical) · taxfoundation.org.
Last updated 2026-04-27 · reflects the One Big Beautiful Bill Act outcome. Verify specific 2026 figures with the IRS before filing. Not financial advice. Do your own research.