Tax Planning
How the 2026 Inflation Adjustments Under the One, Big, Beautiful Bill Affect Everyday Tax Planning
Key changes for 2026 from the IRS infl ation adjustments under the OBBB Act — from new standard deductions to enhanced credits — that should guide your tax planning before filing season.
By NomadicTax Research Team • 5-8 min read • November 24, 2025
## Overview
The *One, Big, Beautiful Bill Act* (OBBB) brought sweeping changes to U.S. tax law, and its 2026 inflation adjustments—announced in Revenue Procedure 2025-32—bring important shifts for taxpayers. IR-2025-103 lists how standard deductions, phase-outs, and tax credits will change starting tax year **2026** (for returns filed in 2027). ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
## Key Adjustments You Should Know
Here are some of the most impactful changes and why they matter:
| Adjustment | 2025 Amount | 2026 Amount | Implication |
|--|--|--|--|
| Standard deduction (single / married filing separately) | $15,750 | $16,100 | Slightly higher deduction for lower-income filers. |
| Married filing jointly deduction | $31,500 | $32,200 | Helps married couples reduce taxable income a bit more. |
| Heads of households deduction | $23,625 | $24,150 | Important for those qualifying as head of household. |
| Estate tax exclusion | approx. $13.99 million | $15.00 million | Estates get a significantly higher exclusion threshold. |
| Foreign earned income exclusion | $130,000 | $132,900 | Means expats can exclude more income from US tax. |
| Employer-provided childcare credit cap | $150,000 | $500,000 / $600,000 (if small business) | Big boost for employers offering childcare benefits under OBBB changes. |citeturn1search1turn1search0
## Examples: What This Means for You
- **Young professional, single** making $55,000 in 2026: With higher standard deductions, your taxable income drops, potentially pushing you into a lower tax bracket phase-out.
- **Married couple approaching estate threshold**: With estates greater than $14 million, the new exclusion provides important relief from estate tax liabilities.
- **Small business employer offering childcare benefits**: You can now qualify for a larger employer-provided childcare credit—worth thousands more annually.
- **US expat or foreign earned income filer**: Slightly higher foreign income exclusion means more of your overseas earnings are shielded — plan financial moves abroad accordingly.
## Actionable Planning Moves
- Estimate your 2026 income and see whether you’ll benefit more from itemizing or using standard deduction under new amounts.
- If estate planning, consider timing property transfers to benefit from increased thresholds.
- Employers should review employee benefits with a lens to enhance childcare offerings to take advantage of expanded tax credit limits.
- Expats: keep clear records of foreign income; you might now retain more untaxed income under the exclusion.
## Compliance Reminders
Tax software providers, payroll systems, and planning tools will need updates to reflect 2026 figures. Make sure any projections or withholding calculations incorporate the new dollar thresholds.
**Bottom line:** These inflation adjustments build on the OBBB Act’s changes, offering opportunities for savings if you actively plan ahead. Adjust your 2026 projections now to make the most of the updated thresholds and deductions.