Tax Planning
Maximizing Deductions and Credits Under the ‘One, Big, Beautiful Bill’ for 2026
Learn how the sweeping One, Big, Beautiful Bill package expands deductions and credits in 2026—and concrete ways to apply them to lower your tax liability.
By NomadicTax Research Team • 5-8 min read • April 21, 2026
## What is the One, Big, Beautiful Bill (OBBB)?
The OBBB is a recent US federal law that introduces major tax reforms starting in 2026. It includes expanded deductions, new credits, and relief for individuals and businesses. Key changes include enhancements to the standard deduction, foreign earned income exclusion, childcare credits, and more. ([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))
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## New Deductions and Credits to Know for 2026
| Provision | What’s Changed | Who Benefits |
|------------|------------------|----------------|
| **Standard Deduction** | Jumps to **$32,200** for married filing jointly; **$16,100** for singles; **$24,150** for heads of households. ([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)) | Those who use the standard deduction; reduces taxable income immediately. |
| **Foreign Earned Income Exclusion (FEIE)** | Increased from **$130,000** to **$132,900**. ([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)) | US expatriates or remote workers abroad. |
| **Enhanced Credits for Employers Providing Childcare** | Employers can take up to **40% credit** of qualifying child care expenses, up to **$500,000/year**; small businesses may claim **50%**, up to **$600,000**. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-business-tax-provisions-youtube-video-text-script?utm_source=openai)) | Businesses with employee care facilities or arrangements. |
| **Additional Standard Deduction for Seniors** | Added **$6,000 per eligible senior** (or **$12,000 if both married spouses eligible**) onto existing standard deduction. Phases out for MAGI over $75,000 (single) or $150,000 (joint). ([irs.gov](https://www.irs.gov/newsroom/2026-filing-season-updates-and-resources-for-seniors?utm_source=openai)) | Seniors who take standard or itemized deductions. |
| **State & Local Tax (SALT) Deduction Expansion** | Temporarily increased cap: $40,000 for joint filers for years 2025–2029; begins indexing. For MAGI over $500,000, phased down. ([irs.gov](https://www.irs.gov/newsroom/understanding-the-one-big-beautiful-bill-individual-tax-provisions-youtube-video-text-script?utm_source=openai)) | Taxpayers in high-tax states who itemize. |
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## Planning Ideas: Actionable Moves for Individuals
- **Itemize or Not?** If after 2026 you typically itemize and have high SALT or property tax, reevaluate whether itemizing still yields more than standard deduction with the higher amounts.
- **Seniors Should Run the Numbers**: For taxpayers aged 65+, check whether the bonus deduction yields more benefit when combined with other standard deductions vs. itemized.
- **Expatriates**: If abroad, track housing expenses carefully under section 911; updated limits apply across geographies. ([irs.gov](https://www.irs.gov/irb/2026-17_IRB?utm_source=openai))
- **Employer Childcare Investments**: Businesses should investigate if building childcare facilities or contracting services will let them claim the new enhanced credits.
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## Watch-Outs & Pitfalls to Avoid
- Some credits expire (e.g., certain energy credits in 2026), so check property acquisition and installation dates. ([irs.gov](https://www.irs.gov/publications/p505?utm_source=openai))
- Phaseouts based on MAGI may cut benefits sharply—overlook them at your peril.
- Proposed regulations on things like digital assets (Form 1099-DA) are still in draft; relying too early may expose you to risk. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-march-2026?utm_source=openai))
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## Real-World Example
> **Case**: Maria, married filing jointly, both aged 68, living in California (high state taxes)
Previously, Maria itemized deductions due to state and property taxes + mortgage interest + SALT cap. With OBBB:
- Standard deduction for their status: $32,200 + $12,000 (for both seniors) = $44,200.
- Their SALT + other itemized would likely exceed that, but with SALT now allowed up to ~$40,000 (plus allowable mortgage interest), Maria must see whether she still beats $44,200.
- If combining business/employer contributions to childcare, that extra credit could reduce their adjusted taxable income further.
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## Key Takeaways
- The OBBB offers big deductions and credits—especially for seniors, business owners, and people in high-tax states.
- Evaluate itemizing vs standard deduction in light of SALT changes.
- Keep an eye on draft regulations that could adjust implementation.
- Start planning now—actions you take in 2026 may determine your benefit for several years.
**Bottom line**: The One, Big, Beautiful Bill has expanded opportunities to reduce tax liabilities. Using the enhanced deductions and credits wisely can lead to meaningful savings.