Tax Planning
Planning for Tax Efficiency Under the One, Big, Beautiful Bill: Key Adjustments for U.S. Individuals
Recent changes under the One, Big, Beautiful Bill (OBBB) bring both opportunities and new considerations for individual taxpayers in 2026—understand how indexing shifts, credited deductions, and reporting thresholds impact your strategy.
By NomadicTax Research Team • 5-8 min read • November 16, 2025
## What Changed Under the OBBB
The One, Big, Beautiful Bill (Public Law 119-21) enacted amendments that affect many common individual tax provisions. A few key ones:
| Provision | 2025 Limit | 2026 Limit |
|---|---|---|
| Standard Deduction (Married Filing Jointly) | $31,500 | **$32,200** ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
| Standard Deduction (Single) | $15,750 | **$16,100** ([stayexempt.irs.gov](https://www.stayexempt.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 | $130,000 | **$132,900** ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
| Estate and Gift Tax Exclusion (Estate) | ~$13,990,000 | **$15,000,000** ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
## Actionable Tax Planning Moves
### 1. Review Filing Status and Standard Deduction Strategy
With higher deductions, some taxpayers may no longer need to itemize. Compare if the jump in standard deductions makes itemizing (e.g., for state & local taxes, mortgage interest) less beneficial.
### 2. Understand New Reporting Thresholds
OBBB reinstated the **$20,000 & 200 transaction** rule for third-party settlement organizations (TPSOs): Form 1099-K is required only when both thresholds are exceeded. That’s a major shift from prior lower 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))
### 3. Adjust Retirement & Gift Planning
With the estate tax basic exclusion rising, individuals with high net worth can give and bequeath more without triggering estate tax. But look at state-level estate tax laws too—they may not align with federal changes.
### Example Scenario: Married Couple Evaluating Charitable Gifts
Suppose a married couple with itemizable deductions totaling $33,000, previously itemizing under a $31,500 standard deduction. With 2026’s standard deduction at $32,200, donating an additional $2,000 before year-end could make itemizing still worthwhile. Plan charitable contributions accordingly, especially if phasing out state deductions or SALT caps loom.
## Trackable Deadlines & IRS Guidance to Watch
- Fact Sheet 2025-08 (Form 1099-K thresholds) released Oct 23. ([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))
- Rev. Proc. 2025-32 sets all inflation adjustments—including AMT, credit limits, etc. ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- Deadlines to act by year-end especially for gift/estate, retirement contributions, 1099-K reporting status.
## Why It Matters
With inflation-adjusted deductions, thresholds, and credit improvements, what didn’t make sense in 2024 or 2025 might be strategic in 2026:
- **Tax liability** could drop for many due to higher deductions and thresholds
- **Compliance risk** could rise for those unaware of new reporting rules like 1099-K thresholds or opportunity zone definitions.
- **Estate planning** gets breathing room—but misalignment among jurisdictions creates traps.
## Bottom Line
Review your filing strategy, gifting and estate plans, and your business or gig income activity. Some changes reduce burden; others shift compliance obligations. The best tax planning starts before December.