Tax Planning
Planning for 2026 Inflation Adjustments: Smart Moves Under the One, Big, Beautiful Bill
With standard deductions and credit limits rising under the One, Big, Beautiful Bill, 2026 brings new opportunities for savings—learn how to adjust withholding, retirement contributions, and gifting strategies.
By NomadicTax Research Team • 5-8 min read • March 29, 2026
## What Adjustments Took Effect in 2026
The IRS announced several inflation-linked changes under the One, Big, Beautiful Bill (OBBB) impacting standard deductions, tax rates, alternative minimum tax (AMT) exemptions, and more. Key changes include:
- **Standard deduction** increased to **$16,100** for singles (up from $15,750), **$32,200** for married filing jointly (up from $31,500), 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))
- **Foreign earned income exclusion** rose 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))
- **Estate tax basic exclusion** jumped to **$15 million**, up from about $13.99 million.([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))
- **Earned Income Tax Credit (EITC)** for those with 3+ qualifying children increased to **$8,231**.([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 Moves You Can Make Now
### Adjust Withholding or Estimates
The raised standard deductions push more tax brackets upward—review your W-4 and estimated payments to avoid overpaying or a surprise bill.
### Maximize Benefit-Timing Opportunities
- For those planning charitable giving, gift up to the annual exclusion level before year-end ($19,000 for most gifts, higher for gifts to non-citizen spouse).
- If expecting tax credits like EITC or child adoption credits, note the raised income thresholds and adjusted limits.
### Optimize Retirement Contributions
- Higher marginal rates at lower income thresholds mean **Roth contributions** may become more attractive—compare with pre-tax options.
- Investors who can qualify for PFML or other benefits should monitor extended transition relief periods (see **Notice 2026-6**) and how contributions may be taxed.([irs.gov](https://www.irs.gov/irb/2026-02_IRB?utm_source=openai))
### Revisit Estate and Gift Planning
With a $15 million estate tax exemption, few estates will owe federal estate tax—but state-level taxes may still apply. Reassess lifetime giving or trust strategies.
## Practical Examples
- A married couple filing jointly with income that just crossed a tax bracket last year may now fall into a lower bracket because of the increased thresholds—adjust their withholding to avoid tax underpayment penalties.
- An individual planning to adopt may benefit from larger adoption credit amounts; align adoption expenses with tax year 2026.
## Risks & Watch Outs
- Watch out for **phase-outs**: Many credits and deductions phase out, so slight income shifts can have large impacts.
- **State tax differences**: Federal inflation adjustments don’t always align with state laws—check your state’s rules.
## Key Takeaway
2026’s inflation adjustments under OBBB are more than just numbers. They change planning thresholds and can impact everything from retirement contributions to estate planning. Review your tax position now to make the most of them—don’t wait until tax season looms.