Tax Planning
Smart Tax Planning Under the One, Big, Beautiful Bill: Inflation Adjustments & Key Changes for 2026
Understanding how the One, Big, Beautiful Bill reshapes inflation adjustments for 2026 can unlock tax savings and improve planning tactics for individuals and businesses.
By NomadicTax Research Team • 5-8 min read • November 17, 2025
## What’s Changing with Inflation Adjustments in 2026 under OBBB
The **One, Big, Beautiful Bill Act**, signed on July 4, 2025, brings sweeping updates to inflation adjustments for more than 60 tax provisions affecting individuals, families, and businesses. Key changes include increased standard deductions, modified marginal tax brackets, changes in credits and exclusions, and new thresholds for various deductions. ([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 Year 2026 Highlights
Here are some of the most salient changes that begin in **tax year 2026** (returns filed in 2027):
- **Standard Deduction Boosts**: Married couples filing jointly will now see $32,200; single and married filing separately, $16,100; heads of household, $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))
- **Alternative Minimum Tax (AMT)**: The exemption for unmarried individuals is set at $90,100, phasing out starting at $500,000. For married filing jointly, phaseouts begin at $1,000,000. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Estate & Gift Tax Exclusion**: The basic exclusion amount increases to $15,000,000 for estates of decedents in 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 & Adoption Tax Credits**: Child tax credit maximum is $2,200; adoption credit expenses allowable up to $17,670, with $5,120 being refundable. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Practical Tax Planning Actions
With these changes in place, here are actionable steps you can take to adjust:
| Scenario | Recommendation |
|---|---|
| **Itemizing vs Standard Deduction?** | Evaluate whether your total deductions exceed the new standard levels; it may shift many taxpayers toward Standard Deduction automatically. |
| **Charitable Giving or State Tax Bunching** | If itemizing, consider bunching deductions into one year to surpass the Standard Deduction, especially with higher thresholds. |
| **Make Large Gifts** | Maximize transfers before 2026 if you’re near the estate exclusion threshold to reduce future potential estate taxes. |
| **Childcare or Adoption Planning** | Adopt before December 31, 2025—depending on timing—for benefit under the increased and partially refundable adoption credit. |
## Business & Self-Employed Considerations
- The **Qualified Business Income (QBI) deduction** minimum threshold of qualified business income is raised to $1,000 (inflation-adjusted), meaning smaller businesses and sole proprietors need substantive net profits to claim it. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
- Bonus depreciation and other secure assets continue to be influenced by changing Indexed limits in Section 179 and others. Plan asset purchases accordingly. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Real-World Example
*Sophia*, a married filer with two kids, anticipates a 2026 taxable income of $110,000. Under OBBB, she uses the new standard deduction of $32,200, reducing her AGI. She maximizes childcare and adoption credits for eligible expenses. As a result, her effective taxable income drops significantly, and she stays in a lower bracket for portions of her income.
## Bottom Line
OBBB’s inflation adjustments provide **new opportunities but also new thresholds**. Whether you’re planning gifts, evaluating deductions, or running a small business, adjusting strategies before the end of 2025—and knowing what kicks in for 2026—can make a meaningful difference.