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2026 Tax Planning Guide
OBBBA and Your Personal Taxes
Read through the following checklist of OBBBA provisions and note any that you think may affect your 2026 tax planning. Further details follow.
The Act:
- Permanently sets the individual tax brackets at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These TCJA brackets would have expired at the end of 2025.
- Makes the TCJA’s increased standard deduction permanent. For 2025, the deduction Increases to $15,750 for single taxpayers, $31,500 for married filing jointly, and $23,625 for heads of household. It will be inflation-adjusted for 2026.
- Creates a permanent charitable contribution deduction for non-itemizers of $1,000 for single taxpayers and $2,000 for married filing jointly, beginning in 2026.
- Introduces a $6,000 senior deduction for individuals who are age 65 or older by the end of 2025. This deduction is available for tax years 2025 through 2028. It phases out for taxpayers with income over $75,000 (single) and $150,000 (married filing jointly).
- Creates a deduction of up to $25,000 for qualified tips received in the 2025 through 2028 tax years. The deduction phases out for taxpayers with income over $150,000 for single filers and $300,000 for married filing jointly.
- Lets single filers deduct up to $12,500 and married couples filing jointly up to $25,000 of qualified overtime compensation received in 2025 through 2028. The deduction phases out for taxpayers with income over $150,000 for single filers and $300,000 for married filing jointly.
- Allows you to deduct automobile loan interest of up to $10,000 per year in 2025 through 2028. The deduction phases out for taxpayers with income over $100,000 (single) or $200,000 (married filing jointly).
- Raises the state and local tax (SALT) itemized deduction cap to $40,000 with a phase-down for taxpayers with income over $500,000, effective 2025 through 2029.
- Increases the base nonrefundable child tax credit to $2,200 in 2026.
- Increases the dependent care assistance program limit to $7,500 in 2026.
- Maintains the increased alternative minimum tax exemptions.
- Creates new tax-exempt savings accounts allowing up to $5,000 of contributions per year and a $1,000 credit for children born 2025 through 2028.
- Expands 529 plan qualified expenses to include more education-related costs.
- Applies a 35-cents-per-dollar limitation on overall itemized deductions for individuals in the top tax bracket beginning in 2026.
- Permanently increases the estate and gift unified exclusion to $15 million beginning in 2026.
- Phases out and repeals various individual energy credit provisions, including the clean vehicle credits.
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