Tax Planning
Tax Planning Strategies Under the One, Big, Beautiful Bill: What Individuals Should Know
The One, Big, Beautiful Bill brings sweeping changes to deductions, credits, and inflation adjustments—this article breaks down how you can plan ahead.
By NomadicTax Research Team • 5-8 min read • March 9, 2026
## Understanding the One, Big, Beautiful Bill (OBBB)
Passed in mid-2025, the One, Big, Beautiful Bill is sweeping tax legislation that introduces many changes for individuals—higher deductions, altered credits, and shifting thresholds. Knowing what's different is key to smarter tax planning. ([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 Changes That Matter
- **Standard Deduction Increases**: For 2026, married couples filing jointly get up to **$32,200**; single filers $16,100; heads of households $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))
- **Foreign Earned Income Exclusion (FEIE)**: Now capped at **$132,900** for tax year 2026, up from $130,000. ([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))
- **EITC Maximums and Phase-Outs**: ETIC for those with 3+ children increases to **$8,231**. Thresholds for phase-out adjusted upward. ([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))
- **Employer-Provided Childcare Tax Credit**: The cap jumps to **$500,000** (or $600,000 for eligible small businesses). Big opportunity for those offering childcare benefits. ([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))
## How to Apply This In Your Planning
- **Itemizing vs. Standard Deduction**: Most people will take the standard deduction under 2026, given its increase. If you have large mortgage interest, state taxes, charitable contributions, compute both ways.
- **Plan Timing of Income and Deductions**: If you anticipate a big itemized deduction, it might make sense to bunch deductions (charity, medical) into one year. Also, defer income if you expect to be in a lower bracket next year.
- **Maximize Child & Dependent Benefits**: Ensure dependents and everyone else have valid SSNs/ITINs **issued on or before the filing deadline**, including extensions. ([irs.gov](https://www.irs.gov/newsroom/prepare-to-file-in-2026-get-ready-for-tax-season-with-key-updates-essential-tips?utm_source=openai))
- **Foreign Earned Income & Digital Nomad Moves**: If you're a U.S. citizen working abroad, FEIE increases mean more income can be excluded. But keep careful records. Change in thresholds may impact how much you're taxed if income exceeds the exclusion.
## Action Steps for You
- Review your 2025 income and deductions now—think ahead before filing for 2026.
- Consult with a tax professional if you have foreign income, self-employment, or childcare benefits. Many rules changed, and some are complex.
- Stay aware of phase-out schedules—especially for higher-income earners.
## Example Scenario
**Emily**, single, 3 kids, owns her own business and works partially from home. Under the new OBBB:
- She will benefit more from the increased standard deduction unless her combined deduction items (mortgage, state taxes, charity) exceed $16,100.
- With EITC maxing higher and income phase-outs increasing, she may qualify for more EITC than before.
- If she pays childcare for her business, her employer (if she has employees or partners) or herself may leverage the boosted childcare credit cap.
By comparing both deductions and staying aware of these new thresholds, Emily can plan her financial year smartly.