Tax Planning
Tax Planning Strategies After the 'One, Big, Beautiful Bill': Inflation Adjustments and Thresholds for 2026
Discover how recent IRS inflation adjustments and changes from the One, Big, Beautiful Bill impact standard deductions, credit limits, and reporting thresholds—and what you can do now to plan smart.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## Understanding the Inflation Adjustments for 2026
The IRS has released inflation adjustments for over 60 tax provisions, thanks in part to **Revenue Procedure 2025-32**, which includes changes under the One, Big, Beautiful Bill (OBBB).([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)) Key adjustments include:
| Provision | 2025 | 2026 |
|---|---|---|
| Standard Deduction (Married Filing Jointly) | $31,500 | **$32,200** ([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)) |
| Standard Deduction (Single) | $15,750 | **$16,100** ([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 Exemption (Single) | – | **$90,100** phase-out starting at $500,000 ([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 | $130,000 | **$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)) |
## Key Threshold Changes You Need To Know
- The maximum **Earned Income Tax Credit (EITC)** for those with three+ qualifying children rises to **$8,231**, up from $8,046 in 2025.([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))
- Gift exclusion to noncitizen spouses increases to **$194,000** 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))
- AMT exemption amounts have also increased—important if your income is high.([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))
## Planning Tactics For Individuals & Families
1. **Time deductions & itemization**: If you usually take itemized deductions, evaluate whether bunching medical or charitable deductions into 2025 could exceed the higher standard deduction in 2026.
2. **Maximize retirement contributions**: Knowing contribution limits may also adjust upward aligns with tax-planning for 2026. Use 2025 contributions where beneficial.
3. **Review dependent and family planning**: Gift exclusion and adoption credit changes could affect timing related to large gifts or adopting.
## Reporting Thresholds & Information Returns: What Shifts Under OBBB
- The **Form 1099-K threshold** for third-party settlement organizations (TPSOs) is now reset to **$20,000 and more than 200 transactions** for businesses and individuals under OBBB. This reverts the threshold that ARPA briefly lowered.([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))
## Example Scenario
Jane, a married couple filing jointly, donates heavily in charitable gifts in autumn 2025. Under the 2025 standard deduction ($31,500), even sizable itemized deductions say $25,000 aren’t enough. But with 2026’s higher standard deduction ($32,200), they may choose to defer some expenses into 2026 to cross the threshold. Meanwhile, suppose Jane sells handmade crafts via an online platform. Under new 1099-K rules, she’ll be subject to reporting only if her payments exceed $20,000 **and** 200 transactions—not simply exceeding $600. That affects whether she must withhold or collect extra records.
## Action Steps Before 2026 Arrives
- Estimate your taxable income & deductions now to see whether to accelerate or delay certain expenses.
- Track transactions with payment platforms; know when you might hit the Form 1099-K trigger.
- Consult a tax professional if you are near major thresholds: AMT exposure, foreign earned income, or large gifting.
**Bottom line**: The OBBB boosts many of the inflation-indexed thresholds, and understanding these adjustments now gives you room to shift your tax posture—accelerating deductions, managing recognition, and planning for reporting thresholds.