Tax Planning
Key Tax Planning Moves After OBBBA: What US Taxpayers Should Know
The One, Big, Beautiful Bill Act (OBBBA) introduced sweeping, **permanent changes** to the US tax code. From tax rate permanence to enhanced credits, here's how to adapt your plan.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## Understanding the “One, Big, Beautiful Bill Act” Permanent Changes
The OBBBA (Public Law 119-21), signed July 4, 2025, made several crucial provisions **permanent**. Here’s what’s locked in: basic individual income tax rates and thresholds, the Child Tax Credit levels, and the creditability of certain refundable portions. These shape planning for 2026 and beyond. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Three Key Planning Opportunities for Individuals and Families
| Opportunity | Description | Example |
|---|---|---|
| **Child Tax Credit Fixed at $2,200** | For taxable years **2025 and onward**, the max CTC is $2,200 per qualifying child; adjusted annually for inflation. Products like this should influence family budgeting. | A family with two children budgeted expecting smaller CTC reduction may plan purchases or expenses later in the year when credit is applied. ([irs.gov](https://www.irs.gov/irb/2025-48_IRB?utm_source=openai)) |
| **Permanent Tax Rate Structure** | The 2025-26 individual tax rate brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) are now the ongoing baseline. No surprise hikes yet. | If your income is rising, you might consider timing deductions or income recognition in 2025 vs 2026. E.g., accelerating deductible expenses in late 2025. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai)) |
| **Penalty Relief for New Reporting** | A specially issued IRS notice provides **relief** from penalties for 2025’s new reporting of qualified tips and qualified overtime comp. Great chance to get systems right without risk. | Restaurants or service businesses implementing tip reporting changes can test their payroll and reporting procedures this year with reduced risk. ([irs.gov](https://www.irs.gov/irb/2025-48_IRB?utm_source=openai)) |
## Actionable Insights To Get Ahead
- **Review payroll/tax software settings** now to ensure proper tip & overtime reporting. Don’t wait until late 2025.
- **Project taxable income** for your household to anticipate bracket crossings under the permanent rates. This could inform timing of bonuses, capital gains, or large deductions.
- **Document expenses carefully**—for families with children, ensure qualifying expenses are well supported to maximize Child Tax Credit eligibility.
- **Tax loss harvesting** might be less impactful under permanent rates, so run scenarios: deferring gains or accelerating losses based on your marginal rate.
## Caveats & Watch-Outs
- **Inflation adjustments** can still shift thresholds. Even with rates being permanent, income brackets and credit amounts are typically adjusted. Always verify 2026 figures.
- **Legislative risk** remains. While many provisions are now permanent, future Congresses always have power to modify tax laws.
- **State taxes** aren’t affected directly by federal changes, but planning steps can influence state tax liability.
## Final Thought
The permanence of OBBBA’s major provisions brings clarity. For tax planning, that means fewer surprises. Use this stability to optimize timing of income/deductions and take full advantage of fixed credits. Whether you’re single, running a business, or managing family finances, this is your moment to act intentionally.