23 Jan The One, Big, Beautiful Bill Act: What the 2026 Tax Shake-Up Means for You

Posted at 12:06h in Finance, Retirement, Taxes by

If you thought tax reform was done and dusted, think again. The One, Big, Beautiful Bill Act (OBBBA) is set to roll out some of the most meaningful tax changes in years starting in 2026—and whether you’re a worker, retiree, parent, or business owner, there’s something here with your name on it.

Let’s break it down without the tax-code headache.

Bigger Deductions, Familiar Tax Brackets

First, the good news most taxpayers will notice right away: bigger standard deductions.

  • $16,100 for single filers
  • $32,200 for married couples filing jointly

On top of that, the familiar tax brackets from the Tax Cuts and Jobs Act—10% through 37%—are now permanent, with inflation adjustments starting in 2026. Translation: fewer surprises and more predictability when planning ahead.

High Earners Face New Limits

For taxpayers in the top 37% bracket, itemizing just got a little less powerful. A new rule caps the value of itemized deductions at 35%, slightly trimming the benefit of deductions like mortgage interest or state taxes for the highest earners.

Charitable giving also sees a tweak: deductions will now apply only after exceeding a 0.5% of AGI floor, meaning very small donations may no longer move the tax needle.

Extra Help for Seniors and Workers

OBBBA adds some targeted relief where it’s often needed most:

  • Seniors (65+) can claim an extra $6,000 deduction from 2025 through 2028.
  • Overtime workers can deduct up to $12,500 of overtime pay, though the benefit begins phasing out at $150,000 in income ($300,000 for joint filers).

This is a rare nod to hourly workers in tax legislation—and one that could make a real difference.

Estate Planning Gets a Major Boost

Estate planners, take note: the estate and gift tax exemption jumps to a massive $15 million per person (or $30 million for married couples), indexed for inflation starting in 2027.

For families with generational wealth—or small business owners thinking long-term—this dramatically reshapes legacy planning.

Introducing “Trump Accounts” for Kids

Starting July 4, 2026, parents and guardians can open Trump Accounts—new tax-advantaged savings accounts designed for children. While details are still unfolding, the goal is clear: encourage early, long-term savings with tax benefits baked in.

Think of it as a new tool in the college-and-beyond planning toolbox.

Families, Adoption, and Childcare Win Big

Families also see meaningful upgrades:

  • Adoption credit rises to $17,670
  • Employer-provided childcare credits increase to:
    • $500,000 for most businesses
    • $600,000 for eligible small businesses

These changes aim to lower barriers for working parents and employers alike.

Businesses Get Supercharged Expensing

For entrepreneurs and investors, OBBBA keeps the accelerator down:

  • 100% bonus depreciation continues for qualifying property
  • Qualified Small Business Stock (QSBS) gain exclusion increases to $15 million per taxpayer

This makes reinvestment, expansion, and startup exits more tax-efficient than ever.

The Bottom Line

The One, Big, Beautiful Bill Act isn’t just a tweak—it’s a structural reshaping of the tax landscape. With higher deductions, expanded credits, generous estate exemptions, and business-friendly provisions, the law is designed to lower tax burdens for most taxpayers compared to prior rules.

Of course, the real impact depends on your income, age, family situation, and business interests—but one thing is clear: 2026 is a year worth planning for. Contact our office to begin!

 

 

 

 

 

 

 

 

 

 

The information provided is for general educational purposes only and is not intended as tax or legal advice. Sandawealth/Stephen & Associates does not provide tax or legal services. You should consult with a qualified tax professional or attorney regarding your individual circumstances before implementing any strategies discussed.

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