Tax Planning
How the US Inflation Adjustments Under the 'One, Big, Beautiful Bill' Change Your Tax Planning for 2026
The US standard deduction and marginal tax rates have shifted for tax year 2026 — here's what you need to know and how to plan accordingly.
By NomadicTax Research Team • 5-8 min read • April 14, 2026
## Overview of the 2026 Inflation Adjustments
The IRS recently released **Revenue Procedure 2025-32**, which implements annual inflation adjustments under the “One, Big, Beautiful Bill” (OBBB). These affect over 60 tax provisions for the 2026 tax year. Notable changes include:
| Item | 2025 | 2026 |
|------|------|------|
| **Standard Deduction (Single / MFS)** | $15,750 | **$16,100** ([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))
| Standard Deduction (MFJ / Surviving Spouse) | $31,500 | **$32,200** ([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))
| Head of Household | $23,625 | **$24,150** ([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))
Other key adjustments include thresholds for the Alternative Minimum Tax, estate tax exclusions (now $15 million) and enhanced employer-provided childcare tax credit limits. ([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))
## Tax Planning Implications & Strategies
To make the most of these new levels:
- **Revisit withholding elections**: With higher deductions and raised thresholds, many taxpayers may want to reduce withholding on their W-4 to avoid overpaying.
- **Plan itemized vs standard deduction**: If last year your deductible expenses were just over the old standard deduction, you may find the new standard deduction now makes more sense.
- **Estate and gifted assets planning**: Higher estate tax exclusion means those considering gifting now have more headroom; review long-term estate plans accordingly.
- **Employer tax benefits**: Employers providing childcare now get a much larger credit—this can be built into benefits packages.
## Real-Life Examples
- A single filer with $20,000 in deductions: Under 2025, deducting itemized expenses might have been necessary; now in 2026 they still fall short of the $16,100 standard, so standard deduction is cleaner.
- Married couple filing jointly with $40,000 in itemized deductions will find they’re better off itemizing—and with new thresholds for credits and exemptions, they save more.
## Actionable Tips For Tax Year 2026
- Update your **budget and planning tools** to reflect new thresholds.
- Consult with a tax advisor if you anticipate hitting multiple thresholds (AMT, estate, etc.).
- Take advantage of increased employer credits such as childcare tax credit and fringe benefits where available.
- Use the increased standard deduction—but only after comparing to your itemized deductions.