Tax Planning
Planning Tips for Eligible Deductions Under the One, Big, Beautiful Bill
The One, Big, Beautiful Bill made sweeping changes to standard deductions, adoption credits, senior deductions, and more. Here's how taxpayers can plan now to maximize benefits for tax years 2025 and 2026.
By NomadicTax Research Team • 5-8 min read • November 17, 2025
## What Is the One, Big, Beautiful Bill (OBBB)?
Enacted July 4, 2025 as Public Law 119-21, the OBBB includes inflation adjustments and expands deductions and credits for individuals and businesses. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
Key changes effective in **tax year 2025** (returns filed in 2026) and **tax year 2026** include:
| Provision | 2025 Change | 2026 Change |
|---|---|---|
| **Standard Deduction** | Married filing jointly: $31,500; Single: $15,750; Head of Household: $23,625 ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) | Married filing jointly: $32,200; Single: $16,100; Head of Household: $24,150 ([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)) |
| **Senior Deduction** | New additional deduction of $6,000 (2025-2028) for those age 65+; phases out for higher‐income taxpayers ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) | Same for 2026 ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) |
| **Adoption Credit** | Enhanced, partially refundable ($5,000 base) for qualified adoptions beginning tax year 2025 ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) | Amount increases to $17,670; refundable portion remains $5,120 ([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)) |
| **Employer-Provided Childcare Credit** | Increased cap to $500,000 (small business up to $600,000) for tax year 2026 ([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 Strategies to Maximize Your Deductions
- **Check income thresholds**: Many deductions phase out at specific modified adjusted gross income (MAGI) levels. For example, the senior deduction phases out above $75,000 (single) and $150,000 (joint) in tax year 2025. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Time expenditures**: If you're considering adoption, substantial childcare support or purchasing a qualified vehicle loan (for the OBBB car loan interest deduction), making decisions in 2025 vs 2026 can matter. Purchases after Dec 31, 2025 may lose some clean energy or car interest benefits. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Employers and payroll groups**: These entities should prepare for new reporting requirements around tips, overtime, and qualified vehicle interest. Transition relief is available for 2025, but planning ahead is essential to avoid disruptions in 2026. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors?utm_source=openai))
- **Adjust withholding now**: Because standard deductions are increased, many taxpayers may have less tax liability. Use the IRS Tax Withholding Estimator (but note exclusions if you have tips, overtime, or vehicle interest in 2025) and update Form W-4 if needed. ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/individuals/tax-withholding-estimator?utm_source=openai))
## Example Scenarios
- **Margaret & Mark, married filing jointly**: Their taxable income is $180,000 in 2026. Their standard deduction will be $32,200 under OBBB instead of earlier amount. They adopt a child with special needs and qualify for the updated adoption credit. The change in standard deduction and adoption benefits together could reduce their taxes by several thousand dollars compared to pre-OBBB amounts.
- **Alice, age 68, single taxpayer**: Her 2025 MAGI is $70,000. She qualifies for the $6,000 senior deduction plus the increased standard deduction. These combine to reduce her taxable income significantly, potentially shifting her into a lower marginal tax bracket.
## Key Takeaways
- **Know the effective dates**: Many changes kick in for tax year **2025 and 2026**, with OBBB provisions running through 2028. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Plan for 2026 forms**: Reporting changes don’t affect 2025 forms W-2/1099/etc., but will in 2026. Employers & payors should prepare systems accordingly. ([irs.gov](https://www.irs.gov/newsroom/irs-announces-no-changes-to-individual-information-returns-or-withholding-tables-for-2025-under-the-one-big-beautiful-bill-act?utm_source=openai))
- **Don’t miss relief provisions**: Notices like 2025-57 (car interest), 2025-62 (tips & overtime), and 2025-55 (remittance tax penalties) give grace to taxpayers and businesses during transitions. Understand and use them. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
**Bottom line:** If you evaluate your income, deductions, filing status, and major life changes now, you can use the One, Big, Beautiful Bill to your advantage over the next few tax years.