Tax Planning
Maximizing the One, Big, Beautiful Bill: Planning Tips for 2026 Standard Deductions & Credits
With the One, Big, Beautiful Bill in force, major shifts in tax deductions, credits, and reporting thresholds mean 2026 tax planning demands strategic moves. Here’s how taxpayers can make the most of your new benefits.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## Understanding the Key Changes under the One, Big, Beautiful Bill
The One, Big, Beautiful Bill (OBBB), effective from 2025, introduced several crucial adjustments affecting tax deductions, credits, and reporting thresholds. Highlights include:
- **Standard Deduction Increases**: For tax year 2026, standard deductions rise to $32,200 for married filing jointly, $16,100 for single filers, and $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))
- **Changes to the Adoption Credit**: The maximum credit now reflects inflation and is partially refundable (up to $5,000), giving respite to families who adopt. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Form 1099-K Threshold Reset**: The reporting threshold for payment settlement entities reverts to over $20,000 and 200 transactions, rolling back the lower levels implemented during ARPA. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
## Tax Planning Strategies for 2026
Here’s how taxpayers can adapt:
1. **Bunching Deductions**: If you itemize, consider timing deductible expenses (medical, charitable, etc.) to cluster into a single year. With higher standard deductions, the benefit of itemizing has grown harder to reach.
2. **Adoption Timing**: For those planning to adopt, close the adoption finalized date in a year when your tax liability is higher, to benefit more fully from the refundable portion.
3. **Monitor Income Splitting & Filing Status**: Married couples should re-evaluate whether married filing jointly remains optimal, especially considering increases in standard deductions and bracket adjustments.
4. **Leverage Employer-Provided Childcare Credit**: With the employer childcare credit cap raised to $500,000 (or $600,000 if small business), employers and employees should ensure documentation and eligibility are in order.
5. **Track 1099-K Activities**: If you receive payments via online marketplaces, understand when you’ll get a 1099-K. Even if no form is issued, all income must be reported. Adjust bookkeeping for platforms and thresholds. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
## Practical Examples
| Scenario | Old vs New | Planning Action |
|---|---|---|
| Single filer with taxable income near $50,000 | Standard deduction jumped from ~$13K to $16,100 | Likely no longer need to itemize; instead take standard deduction and simplify recordkeeping |
| Married couple adopting with modest income | Adoption credit partially refundable ensures some benefit even if tax due is low | File in correct year, document special needs determination via tribal/state government as required under OBBB Section 70403 |
| Side business selling through marketplace apps | Previously risked getting 1099-K under low thresholds | Now less risk until higher volume; still maintain income records and track transaction volume |
## Action Items Before Filing
- Update withholding or estimated tax payments if changes in standard deductions reduce tax liabilities.
- Use online tools or new guidelines from IRS to estimate credits and adjust.
- If you receive multiple payment forms (tips, overtime, marketplace sales), review them carefully for reporting thresholds and due forms.
- Retain all receipts and documentation related to childcare, adoption, and other qualifying expenses.
## Bottom Line
The OBBB makes substantial changes that can benefit many taxpayers—but to capture those benefits, planning is essential. Review your income sources, deductions, and credits well before filing, and adjust strategies to reflect higher standard deductions, new thresholds, and credit reforms.