Tax Planning

Maximizing Tax Savings with the One, Big, Beautiful Bill: Key Planning Moves for 2026

New inflation adjustments and law changes from the One, Big, Beautiful Bill offer fresh planning opportunities—especially for families, high-earners, and small businesses.

By NomadicTax Research Team • 5-8 min read • March 1, 2026

## Overview of Major Adjustments for Tax Year 2026 A host of **inflation-based and law-driven changes** became effective for tax year 2026. Some standout shifts include: - **Higher standard deductions**: $16,100 for single filers, $32,200 for married filing jointly, $24,150 for heads of household. ([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)) - **Raised income brackets** for most federal tax rates, keeping top marginal rate at 37%. ([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)) - **Increased foreign earned income exclusion**: now $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)) - Enhanced **employer-provided childcare credit** limits—up to $500,000 ($600,000 for eligible small businesses). ([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)) These adjustments also affect estate, gift, and adoption credits. ([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)) ## Tax Planning Strategies to Consider Here are actionable ways to make the most of 2026 changes: - **Accelerate income or deductions carefully**: If you expect higher income or business profits this year, it could make sense to defer income into 2026 to take advantage of pause before bracket creep. For high-earners, pushing some income into years where tax rates or brackets are expected to shift could reduce liability. - **Reassess itemized vs. standard deduction**: With higher standard deduction thresholds, many taxpayers who typically itemize may now find taking the standard deduction more beneficial. Use projections of mortgage interest, state/local taxes, medical expenses to make an informed decision. - **Foreign income planning for digital nomads**: The rise in Foreign Earned Income Exclusion (FEIE) means look out for whether your exclusions will be more powerful, especially if you're earning just above the new threshold. Maximizing housing expense and foreign living deductions could pair well. - **Child care and family credits**: Families should explore employer-provided childcare credits and the adoption credit since both saw enhancements. Especially valuable for small business owners who provide childcare to employees. - **Trust and estate gift planning**: With higher estate exclusion amount, individuals may use gifting strategies now without risk of gift or estate tax. Given the exclusion moved to $15,000,000, large estates may feel less pressure to transfer assets aggressively now. ([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)) ## Practical Examples - **Example A**: A married couple filing jointly was itemizing deductions worth $30,000 previously in 2025. In 2026, with standard deduction increasing to $32,200, standard deduction might now exceed their itemized total—so choose standard deduction. - **Example B**: A freelancer overseas earning $135,000 and living abroad for full 2026 could exclude $132,900 in foreign earned income, avoiding U.S. taxation on most of it, while also deducting housing where applicable. - **Example C**: A small business with childcare offerings may now get a large benefit by claiming employer-provided childcare expense credit up to $600,000. ## Actionable Steps Before Filing - Calculate adjusted taxable income under both 2025 and 2026 thresholds. - If tax rates or thresholds will shift significantly, consider income/tax timing adjustments. - Document foreign residence or childcare expenses carefully to meet records requirement. - Consult with a tax professional to structure estate/gift transfers under new thresholds. By aligning your tax planning with these adjustments, you can reduce overall liability, better use credits, and improve financial outcomes in 2026.