Tax Planning

Navigating the One, Big, Beautiful Bill: Tax Planning Moves for 2026

The One, Big, Beautiful Bill (OBBB) ushers in sweeping tax changes for 2025–26. Learn which new deductions, exclusions, and credits you can capitalize on this season.

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

## What is the One, Big, Beautiful Bill (OBBB)? Signed into law on **July 4, 2025**, Public Law 119-21 brings major shifts to U.S. tax law. Key provisions affect standard deductions, marginal tax rates, care credits, special deductions for seniors, 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)) --- ## Major Tax-Planning Opportunities ### 1. Higher Standard Deductions & Adjusted Rates - For **2026**, married filing jointly gets a deduction of **$32,200**; single filers get **$16,100**; heads of household get **$24,150**. ([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 brackets are adjusted upward, helping many move into lower tax burdens. Top rates (35-37 %) start at higher income thresholds. ([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)) ### 2. No Tax on Qualified Tips & Overtime Income (2025–28) - If you're an employee or self-employed in a tipped occupation, qualified tips reported on W-2, 1099, etc., may be deducted starting 2025. Max deduction: **$25,000**, with phase outs at higher income levels. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions?utm_source=openai)) ### 3. Estate, Adoption & Child Tax Credit Enhancements - **Estate tax exclusion** rises to **$15 million** for decedents in 2026. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions?utm_source=openai)) - **Adoption credit** increases (to $17,670) and becomes **inflation-indexed**, with **$5,120 refundable** for 2026. ([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)) - **Child Tax Credit** permanently increased to **$2,200 per qualifying child**, with enhanced phaseouts and Social Security number requirements. ([irs.gov](https://www.irs.gov/irm/part4/irm_04-019-014r?utm_source=openai)) ### 4. Expanded Access to Health Savings Accounts (HSAs) - Notice **2026-5** provides guidance expanding who qualifies for HSAs under IRC § 223. More people can now open HSA accounts if eligible, and contributions/distributions rules are clearer. ([irs.gov](https://www.irs.gov/irb/2026-02_IRB?utm_source=openai)) ### 5. Permanent 100% First-Year Depreciation Deduction (§ 168(k)) - Property acquired **after January 19, 2025** may now qualify for **100% additional first-year depreciation** (no phase-down). This also applies to specified plants and certain sound recordings. ([irs.gov](https://www.irs.gov/irb/2026-06_IRB?utm_source=openai)) --- ## Concrete Planning Tips - **Do a bracket check**: If your income is near thresholds—for example, for married filing jointly (~$768,700 for 37%)—you might benefit from deferring income or accelerating deductions. - **Seniors and older taxpayers** (65+): You may qualify for an **additional senior deduction** (effective 2025-28); check limits and phase-outs. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions?utm_source=openai)) - **Gig workers & tipped employees**: Track tips carefully; file Form 4137 if needed. Deduct them under the qualified tips rule. - **HSAs**: Max out contributions if eligible; now available to more people. Use for qualifying medical expenses to reduce taxable income. - **Business owners & households planning capital investments**: Acquire qualifying property after Jan 19, 2025, to fully deduct costs in the first year. Considering sound recording or related creative property? Might also benefit. - **Gifting & estate planning**: With exclusion now at $15M (2026), large estates may need to reconsider timing of gifts or trusts to leverage the full exclusion. --- ## What to Watch Out For - Income thresholds for many phase-outs increased—but phase-outs remain. High earners should model carefully. - Not all new provisions have full regulatory guidance yet. Some rules (e.g. § 168(k) proposed regulations) are still under development—rely on interim guidance. ([irs.gov](https://www.irs.gov/irb/2026-06_IRB?utm_source=openai)) - For nonresident aliens or international work, the foreign earned income exclusion, substantial presence and treaty rules still apply as before; don’t assume new OBBB provisions override those rules. --- Using the changes under the One, Big, Beautiful Bill proactively—especially for deductions, credits, depreciation—can lead to material savings in 2026. Planning ahead is crucial while IRS finalizes many of the implementing regulations.