Everyday taxes · Explainer

After the One Big Beautiful Bill.
What the 2026 tax code actually looks like.

READ8 min·UPDATED·APPLIES TOUnited States·LEVELIntermediate
For taxpayers wanting to know current brackets/deduction after OBBBA. Sources are listed at the bottom of the page; check their dates before acting.

The One Big Beautiful Bill Act, signed July 4, 2025, made most TCJATax Cuts and Jobs Act (TCJA)The 2017 federal tax law that nearly doubled the standard deduction, capped the state and local tax (SALT) deduction at $10,000, and cut individual and corporate tax rates. In July 2025 the One Big Beautiful Bill Act made most of its personal cuts permanent and raised most filers' SALT cap to at least $40,000 through 2029.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.

This page covers US-specific federal tax law. Outside the US, the rest of this site offers general financial principles that translate, but the specific provisions discussed here are unique to the United States.

Tax-year figures. Numbers on this page are for the 2026 tax year unless a different year is named. Limits and brackets change every year.

This page explains what OBBBA made permanent and what remains temporary. For the exact 2026 bracket thresholds, capital-gains bands and full standard deduction table, see 2026 Tax Brackets.

// UPDATED APRIL 2026 The TCJA provisions described here were made permanent by the One Big Beautiful Bill Act, signed July 4, 2025. This page has been rewritten to reflect what happened. The earlier "tax cliff" framing no longer applies for most provisions.
Short answer

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 after 2028 unless extended. Verify any specific number with the IRS before relying on it for filing.

On this page
  1. Section 1 · What happened
  2. Section 2 · What OBBBA made permanent
  3. Section 3 · What is still temporary (set to expire after 2028)
  4. Section 4 · The 2026 numbers
  5. Section 5 · What this means for planning

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 ×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 ↗ Source 1 in the list belowThe 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 ×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 ↗ Source 2 in the list belowPublic 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.

OBBBA: what stays, what expires
  1. 2017TCJA enactedMost individual cuts were temporary
  2. Jul 4, 2025OBBBA signedMade most cuts permanent
  3. After Dec 31, 2025Sunset avertedFor most cuts
  4. 2026Most rules carry overLooks like 2025 plus inflation adjustments
  5. After 2028New breaks endMost new deductions, unless extended
What OBBBA did
Made permanent
10% to 37% brackets2026 standard deduction: $16,100 single, $32,200 MFJUp to 20% QBI deduction2026 estate exemption: about $15M per person$750,000 mortgage capNo personal exemptions
Added, set to expire after 2028
No tax on tipsNo tax on overtime premiumCar loan interest deduction65+ bonus deduction
Each comes with eligibility rules, income phase-outs or occupational limits.
OBBBA was signed July 4, 2025, before the scheduled sunset after December 31, 2025, so the TCJA brackets, higher standard deduction, QBI deduction and estate exemption are now permanent. The new deductions for tips, overtime, car loan interest and people 65 and older expire after 2028 unless Congress extends them.

Section 2 · What OBBBA made permanent

LOWER INDIVIDUAL TAX BRACKETS

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-adjustedAdjusted for rising prices. Some amounts move with inflation, like IRS tax brackets, TIPS principal, or I-bond rates. Others are restated in today's dollars so different years can be compared: by the BLS consumer price index, $30,000 in 1985 bought about what $93,000 buys in 2026. each year. Verify the exact 2026 thresholds on the tax estimator or at irs.gov.

HIGHER STANDARD DEDUCTION

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. ×DON'T TRUST, VERIFYClaim: 2026 standard deduction is $16,100 single and $32,200 MFJ.Verify at: irs.gov inflation adjustment notices ↗ Source 3 in the list belowThe IRS publishes annual inflation-adjustment numbers (typically in fall for the upcoming year) in a Revenue Procedure. Numbers may shift slightly when finalized.

QBI DEDUCTION (SECTION 199A)

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. The deduction is capped at 20% of taxable income, so the full $30,000 requires at least $150,000 of taxable income before the deduction. 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.

ESTATE AND GIFT TAX EXEMPTION

2026 exemption: approximately $15 million per person, $30 million for married couples. Indexed for inflation going forward. ×DON'T TRUST, VERIFYClaim: 2026 estate and gift tax exemption is approximately $15M per person ($30M MFJ).Verify at: irs.gov/estate-tax ↗ Source 4 in the list belowThe 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.

ELIMINATION OF PERSONAL EXEMPTIONS

TCJA eliminated personal exemptions (the line that used to give you a deduction for yourself, your spouse and each dependent on top of the standard deduction). OBBBA kept that elimination. The higher standard deduction, the Child Tax Credit and the Other Dependent Credit do the work that personal exemptions used to do.

$750,000 MORTGAGE INTEREST CAP

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.

MISCELLANEOUS ITEMIZED DEDUCTIONS LIMIT

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 after 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. ×DON'T TRUST, VERIFYClaim: OBBBA added new temporary individual deductions set to expire after 2028.Verify at: irs.gov OBBBA implementation guidance ↗ · congress.gov ↗ Source 3 in the list belowSpecific 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 deduction, available with or without itemizing, beyond the existing senior standard-deduction amount. Set to expire after 2028.
  • Car loan interest deduction. A limited deduction for personal auto loan interest, with caps and qualifying-vehicle requirements. Set to expire after 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 after 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 after 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:

STANDARD DEDUCTION (2026)
  • Single: $16,100
  • Married filing jointly: $32,200
RETIREMENT LIMITS (2026)
  • 401(k) employee: $24,500 (catch-up 50+: $8,000)
  • IRAIndividual Retirement Account (IRA)A retirement account with tax advantages and eligibility rules. Traditional IRA contributions may be deductible; taxable withdrawals generally enter income. Roth contributions use after-tax money, and qualified Roth withdrawals are tax-free.Full definition: $7,500 (catch-up 50+: $1,100)
  • HSAHealth Savings Account (HSA)A health savings account available only when eligibility requirements are met. Federal tax benefits depend on contribution limits and qualified medical expenses. Health coverage, other coverage and Medicare enrollment can affect eligibility; state tax treatment can differ.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

EVERYONE

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.

SELF-EMPLOYED OR S-CORP OWNERS

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.

ESTATES UNDER $15 MILLION

No federal estate tax exposure. Planning shifts from "use the exemption before it drops" to long-horizon questions: stepped-up basisStepped-up basisThe tax rule that resets an inherited asset's cost basis to its market value on the date the owner died. If Bitcoin bought for $5,000 is worth $100,000 at death, the heir's basis is $100,000, so the lifetime gain is never taxed as a capital gain. Traditional IRAs and 401(k)s get no step-up.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.

ESTATES OVER $15 MILLION

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.

FAMILIES WITH KIDS

The Child Tax Credit ($2,000 per qualifying child under TCJA) is $2,200 per child in 2026 under OBBBA. Verify the exact 2026 refundable portion and phase-out thresholds at irs.gov. Roth conversionRoth conversionMoving eligible retirement money into a Roth account. Pre-tax amounts and earnings generally create taxable income; nondeductible basis is treated under the applicable aggregation rules. Conversions can affect tax brackets and income-based costs, and separate withdrawal rules apply.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.

HIGH-TAX-STATE ITEMIZERS

The SALTState and local tax (SALT)State and local taxes (income or sales tax, plus property tax) that itemizers can deduct on their federal return, up to a cap: $40,400 for 2026, rising 1% a year through 2029, then back to $10,000 in 2030. In 2026 the cap shrinks toward $10,000 once modified adjusted gross income passes $505,000.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.

RELATED PAGES
Tax Strategy · the broader playbook NIIT and AMT · the surprise taxes Tax Estimator · run your 2026 projection LLC vs S-Corp · QBI is now permanent Wills and Estate Planning · long-horizon planning Financial Numbers · current limits and brackets

Where to go from here

Do next

Full Tax Estimator

Run your full numbers through the estimator using these newly-permanent OBBBA rules.

Read next

NIIT and AMT

Two additional federal taxes that layer on top of these brackets.

Explore further

Sources

Verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.

  1. Public Law 115-97 (Tax Cuts and Jobs Act of 2017) · congress.gov. ↩
  2. One Big Beautiful Bill Act (signed July 4, 2025) · congress.gov (search by full name for current text and Public Law number). ↩
  3. IRS. Annual inflation-adjustment Revenue Procedures (2026 figures) · irs.gov. ↩
  4. IRS. Estate and gift tax page · irs.gov/businesses/small-businesses-self-employed/estate-tax. ↩
  5. IRS. Final regulations confirming no clawback of TCJA-era gifts · irs.gov.
  6. IRS. Qualified Business Income Deduction · irs.gov.
  7. Tax Foundation. Pre-OBBBA TCJA expiration analysis (historical) · taxfoundation.org.

Last updated . Reflects the One Big Beautiful Bill Act outcome. Verify specific 2026 figures with the IRS before filing. Not financial advice. Do your own research. Disclosures · How pages are reviewed

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