Tax Planning
Leveraging the One, Big, Beautiful Bill for Your 2026 Tax Planning
Discover critical tax-law changes under the One, Big, Beautiful Bill (OBBB) that taxpayers must know to plan smartly for 2026—including standard deductions, credit expansions, and clean energy deadlines.
By NomadicTax Research Team • 5-8 min read • February 19, 2026
## Key Changes Under OBBB for 2026
The One, Big, Beautiful Bill, enacted on **July 4, 2025** (Public Law 119-21), introduces sweeping tax law changes affecting individuals, families, and businesses for tax years beginning after December 31, 2024.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) Important highlights include:
- **Increased standard deductions**: for 2026, married couples filing jointly can deduct $32,200; single filers, $16,100; heads of household, $24,150.([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- **Higher income-tax brackets and AMT thresholds**: top rate of 37% for single filers at over $640,600; AMT exemption increased to $90,100 for singles.([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- **Adoption credit increase**: up to $17,670 per child, with **$5,120 refundable**.([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- **Expanded Childcare credit for employers**: credit limits raised to $500,000 ($600,000 for eligible small businesses).([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- **Clean energy credit expirations**: many clean vehicle, residential clean energy, and energy improvement credits expire at the end of 2025.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Tax Planning Strategies
To make the most of these changes, consider the following tactics:
### 1. Accelerate or Delay Expenses
- If you were planning clean vehicle or residential clean energy expenditures, make purchases **before** December 31, 2025 to qualify for expiring credits.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- Alternatively, defer certain expenses to 2026 if beneficial under your cash flow or income projection.
### 2. Reassess Filing Status and Phase-outs
- Because income thresholds for deductions and credits have increased, assess whether **married filing jointly** or **separately** yields better results.
- Be mindful of phase-outs for credits like Child Tax Credit, Adoption Credit, and Qualified Business Income Deduction—stay just under phase-out ranges if possible.([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
### 3. Use New and Enhanced Deductions
- **Qualifying overtime and tips deductions**: under OBBB, certain tips and overtime pay are no longer taxed or are deductible.([irs.gov](https://www.irs.gov/newsroom/tax-tips-for-january-2026?utm_source=openai))
- **No tax on car loan interest**: guidance now exists for when car-loan interest is deductible.([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/news-releases-for-december-2025?utm_source=openai))
## Examples
| Scenario | Impact of OBBB Changes |
|---|---|
| Single parent with 3 children earns $60,000 | Higher standard deduction + increased EITC may significantly boost refund. |
| Small business providing childcare benefit | Employer can now claim up to $500,000 credit, offering substantial support. |
| Individual planning to buy EV in 2026 | Likely misses new 2025 expiration—credit not allowed after Sept 30, 2025. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) |
## Actionable Insights
- Review major expenditures for timing before year-end 2025.
- Project your income to understand where you fall in bracket or credit phase-out thresholds.
- Work closely with tax professionals to ensure compliance with new rules and maximize refunds or credits.
- Keep updated with IRS guidance—especially around clean energy, clean fuel, and foreign entity involvement. Recent notices clarify “material assistance” by prohibited foreign entities for credits.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-guidance-for-certain-energy-tax-credits-regarding-material-assistance-provided-by-prohibited-foreign-entities-under-the-one-big-beautiful-bill?utm_source=openai))