Tax Planning
Maximizing Deductions in 2026 Under the One, Big, Beautiful Bill
Explore new deductions made permanent or expanded by the One, Big, Beautiful Bill and how individuals and digital nomads can plan ahead to reduce taxable income.
By NomadicTax Research Team • 5-8 min read • June 30, 2026
## Understanding The One, Big, Beautiful Bill (OBBB)
The *One, Big, Beautiful Bill* (OBBB), signed into law on **July 4, 2025**, introduced sweeping changes to the U.S. tax code; many critical changes apply retroactively to tax year 2025.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions-individuals-and-workers?utm_source=openai)) Notably, several deductions were made permanent or expanded—key opportunities for taxpayers to reduce taxable income.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai))
## Noteworthy Deductions & Credits to Leverage
| Deduction/Credit | What’s New for 2025–2026 | Who Benefits Most |
|------------------|----------------------------|--------------------|
| **Qualified Business Income (QBI) Deduction** | Permanently established under OBBB; no sunset date.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai)) | Self-employed, LLCs, S Corps with eligible flow-through income |
| **Casualty Loss Deductions** | Expanded to include losses tied to state-declared disasters.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai)) | Homeowners or property owners in regions with frequent natural disasters |
| **Senior Deduction & Car Loan Interest** | New deduction for **car loan interest** and expanded **senior** (age threshold) deductions.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions-individuals-and-workers?utm_source=openai)) | Seniors; those who financed new car purchases |
| **Itemized Deductions Phase-Down** | High-income taxpayers will see reduced itemized deductions once taxable income exceeds certain thresholds; ceilings reintroduced.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai)) | High earners maximizing mortgage interest, SALT, medical deductions |
## Tax Planning Tips & Practical Examples
- **Digital nomads** can still take advantage of QBI deduction, but must carefully document business structure and income source to avoid disqualifications.
- **Homeowners** in disaster-prone areas should track state-declared declarations and retain receipts—new casualty loss rules apply to more situations. Example: If you live in a county where the governor declares disaster, losses from that event may now be deductible beyond previously narrow criteria.
- **Seniors** (born before Jan 2, 1962) or those over the age threshold: check eligibility for extra deductions for car loan interest. Even if you recently financed a vehicle, evaluate whether the interest qualifies under the new law.
## Actionable Insights to Maximize Benefit
1. Begin using **Schedule 1-A** on your 2025 or 2026 return—it consolidates new deductions related to overtime, tips, car loan interest, and senior deductions.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai))
2. Estimate your taxable income early—if income is likely to exceed deduction phase-down thresholds, consider deferring income or accelerating deductible expenses.
3. Keep detailed records: receipts, loans, disaster loss documentation, and proof of age or eligibility. Crucial for deductions under OBBB.
4. Consult with a tax professional if you have mixed-income sources, international ties, or rental/business income—you may need to elect QBI properly and avoid hidden pitfalls.
## For Digital Nomads & International Earners
- If you live abroad, **foreign earned income exclusion (FEIE)** increased to **$132,900** for 2026—plan compensation accordingly.([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))
- For nonresident aliens: the updated **Form 1040-ES (NR)** reflects changes under OBBB—watch for modifications in itemized deductions and eligible credits.([irs.gov](https://www.irs.gov/forms-pubs/updates-to-the-2026-form-1040-es-nr?utm_source=openai))
By understanding what deductions are permanent, recently expanded, or newly introduced, you can strategically reduce taxable income through accurate planning, record-keeping, and structuring of income and expenses.