Tax Planning
Tax Planning Strategies Under the One Big Beautiful Bill Act: What You Need to Know Now
With sweeping changes under the One Big Beautiful Bill (OBBB), individuals and businesses can unlock deductions and adjust withholding—only if they act by understanding the timing and thresholds.
By NomadicTax Research Team • 5-8 min read • February 21, 2026
## Overview of the OBBB’s Key Tax Planning Changes for 2025–2026
Enacted in July 2025, the **One Big Beautiful Bill (OBBB)** significantly overhauled U.S. tax law. Many changes affect deductions, reporting thresholds, and credits. These take effect in *taxable years beginning after December 31, 2024* or in *calendar year 2026* depending on the provision. Leveraging them properly requires early planning. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
### Major Adjustments You Should Know
| Change | What’s New | Useful for Whom |
|---|---|---|
| **Higher standard deductions and raised brackets** | Single filers get $16,100; married filing jointly gets $32,200 in tax year 2026. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) | Those who don’t itemize; avoids creeping into higher rates due to inflation. |
| **Foreign Earned Income Exclusion** | Up to $132,900 for 2026, slight increase over 2025’s $130,000. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai)) | Digital nomads, expats, high-earning foreign assignments. |
| **Form 1099-K / backup withholding thresholds** | Under the proposed regs (IR-2026-03), backup withholding and Form 1099-K only kick in if payments via third-party networks exceed **$20,000 AND more than 200 transactions** in a calendar year. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-reflecting-changes-from-the-one-big-beautiful-bill-to-the-threshold-for-backup-withholding-on-certain-payments-made-through-third-parties?utm_source=openai)) | Gig workers, small online sellers, marketplaces. |
| **Expensing business property (§ 179, Additional First-Year Depreciation)** | Businesses can deduct full cost of qualifying property placed in service after Jan 19, 2025. § 179 limits and phaseouts raised. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai)) | Small and mid-sized enterprises making capital investments. |
| **Higher estate and gift tax exemptions** | For 2026, the basic exclusion amount—including generation-skipping transfers—is $15,000,000, inflation-adjusted. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai)) | Estates, high-net-worth individuals planning inheritance. |
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## Actionable Tax Planning Moves
1. **Gather documentation for deductions now.** If you're eligible for the new senior deduction, overtime and tips exemptions, charitable cash deductions without itemizing, line up your receipts and accounts. Many changes apply starting 2025. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
2. **Monitor your transactions on third-party platforms.** If you are near the **200 transactions / $20,000** threshold, evaluate whether splitting activities or consolidating transactions might help avoid backup withholding. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-reflecting-changes-from-the-one-big-beautiful-bill-to-the-threshold-for-backup-withholding-on-certain-payments-made-through-third-parties?utm_source=openai))
3. **Estimate income to avoid bracket creep.** With bracket thresholds shifting slightly, ensure you adjust withholdings or estimated payments if you receive raises, bonuses, or variable income. This is especially relevant if your spouse’s employment rises or if investment income increases.
4. **Maximize § 179 deductions and first-year expensing.** Engage in planned equipment purchases or software investments before year-end to take full advantage of the new thresholds. Also check phaseouts so you don’t lose benefit. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
5. **Estate planning updates.** With the new $15 million exemption (for 2026), trusts, wills, and gifting strategies may need redesigning. Check state limits too—they may differ.
6. **Stay tax compliant and adaptive.** Because many changes are newly effective or proposed, keep an eye on IRS/regulation updates (e.g. must comment on proposed rules by drawing attention before finalization). Ishifts occur such as the proposed backup withholding regs. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-reflecting-changes-from-the-one-big-beautiful-bill-to-the-threshold-for-backup-withholding-on-certain-payments-made-through-third-parties?utm_source=openai))
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## Example Scenarios
- **Freelance graphic designer** with 150 transactions via payment apps totaling \$18,000 in 2026—entropy ticks below both thresholds so **no backup withholding** under proposed rules. If exceeded both, withholding could apply retroactively.
- **Small business owner** buys new machinery worth \$3M after Jan 1, 2025—can likely take full § 179 deduction, subject to inflation-adjusted limit and phase-out.
- **Estate planner** mapping inheritances for a person with \$14 million estate—under new exemption may avoid federal estate tax; under old law would have taxed more.
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## Key Takeaways
- Many changes under the OBBB are *already effective* for the 2025-2026 tax cycle—don’t assume 2027.
- Focus on threshold changes (transactions, income) to avoid surprise withholdings.
- Capital investments, donation timing, and documentation matter more than ever.
- Use IRS tools like **Get Ready**, individual IRS accounts, and keep up with proposed regulations.
**Bottom Line:** With informed planning, the updates from the One Big Beautiful Bill offer opportunities to reduce liabilities—if you act proactively and understand where timing and thresholds apply.