Tax Planning
Maximizing Deductions and Credits under the One, Big, Beautiful Bill
Understanding the newest inflation adjustments and reporting thresholds empowers taxpayers and businesses to optimize deductions and avoid penalties under the One, Big, Beautiful Bill.
By NomadicTax Research Team • 6 min read • November 21, 2025
## Introduction
The **One, Big, Beautiful Bill (OBBB)** has introduced sweeping tax changes impacting inflation adjustments, thresholds, and credits. For 2025–2026, these changes affect everything from what counts as reportable income under Form 1099-K to how much you can contribute to retirement plans. In this article, you’ll get actionable planning strategies for 2025 tax compliance and ways to legally maximize deductions and credits.
## Key Changes under OBBB
- The IRS issued **revenue procedure 2025-32**, announcing annual inflation adjustments for more than 60 tax provisions—including tax rate schedules. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- The reporting threshold for **Form 1099-K** reverted to **$20,000 and over 200 transactions**, as reinstated by OBBB. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
- New guidance on **Employee Retention Credit** (ERC) limitations for Q3–Q4 2021 claims filed after January 31, 2024. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Tax Planning Strategies
### 1. Review Withholding Now
Use the IRS **Tax Withholding Estimator** to check whether recent tax law changes (inflation adjustments, OBBB thresholds) require updating your W-4. Underwithholding can lead to large tax bills and penalties. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
### 2. Retirement Plan Contribution Boosts
The 401(k) contribution limit for **2026 rises to $24,500** (up from $23,500 in 2025). If you haven’t maxed out your contribution for this year, reviewing your contribution schedule or switching to salary deferral can help. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
### 3. Business Credit Review (ERC)
Check whether you're eligible for ERC credits, especially for Q3–Q4 of 2021. The new guidance limits credit claims filed after statutory deadlines. Consider whether amending past returns is feasible. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
### 4. Payment Processing & Reporting
If you accept third-party payments (via payment platforms), understand whether you cross the Form 1099-K thresholds. Plan transactions to avoid unnecessary reporting burdens. Keep records of transaction type and count to remain under thresholds where desired. ([irs.gov](https://www.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
### 5. Forecasting for 2026 Costs
Inflation adjustments affect standard deductions, tax bracket thresholds, and many dollar limits. Budget your expected taxable income and deductions—if possible, push deductible expenses into years where higher thresholds or more favorable brackets will apply. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Practical Examples
- **Independent contractor B** typically gets around 250 transactions/year via third-party platforms (like a marketplace). Under the reinstated 1099-K rules they’ll need to report. But if they reorganize to split their business over multiple entities or platforms, they might stay under both thresholds (per platform), though careful about aggregation rules.
- **Small business C** expecting to pay remittance transfer tax starting 2026: use **Notice 2025-55** transition relief to avoid penalties for mis-computed deposits through first three calendar quarters. Plan cash flow to cover payments retroactively without penalty risk. ([irs.gov](https://www.irs.gov/irb/2025-43_IRB?utm_source=openai))
## Action Items for Mid-2025
| Task | Who it’s for | Deadline or Effective Date |
|------|--------------|-----------------------------|
| Review W-4 withholding | All wage-earners | Before end of calendar year |
| Plan contributions toward 401(k) and other retirement vehicles | Employees and self-employed | From Jan 1, 2026 on |
| Check eligibility for retroactive ERC claims if not yet filed | Businesses active during 2021 | ASAP, due to statute limitations |
| Track transaction counts under 1099-K thresholds | Independent contractors/p2p sellers | End of each quarter |
| Budget for new remittance transfer tax deposits | Remittance providers | Due Jan 29, 2026 for Q1 2026 |
## Conclusion
The One, Big, Beautiful Bill’s provisions are already reshaping tax planning for many individuals and businesses. By staying in front of reporting thresholds, adjusting retirement plan contributions, and leveraging transition relief where available, you can reduce your exposure to penalties and optimize after-tax income. Keeping up with IRS announcements and acting early is your strongest strategy.