Tax Planning
Tax Planning Strategies under the U.S. Inflation-Indexed 2026 Tax Rules
The 2026 IRS inflation adjustments bring big shifts in deductions, rates, and thresholds—tax planners must adapt strategies to maximise savings under the One, Big, Beautiful Bill.
By NomadicTax Research Team • 5-8 min read • April 17, 2026
## What’s Changing for Tax Year 2026
The IRS has issued inflation adjustments under the One, Big, Beautiful Bill affecting over 60 tax provisions. Key changes include:
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Standard Deduction (Single) | $15,750 | $16,100 | +$350 |
| Married Filing Jointly | $31,500 | $32,200 | +$700 |
| Head of Household | $23,625 | $24,150 | +$525 |
| Foreign Earned Income Exclusion | $130,000 | $132,900 | +$2,900 |
| AMT Exemption, Single filers | – | $90,100 | New level in 2026 |
These adjustments are effective for tax returns filed in 2027 but for income earned 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))
## Tax Planning Strategies to Maximise Benefits
To leverage the shifts, here’s what individuals and businesses can do:
- **Maximise itemized deductions**: With standard deductions increasing, only those who regularly exceed those limits benefit. Consider grouping deductions like charitable contributions into 2026 if you're close.
- **Foreign Earned Income Planning**: The exclusion rising to $132,900 may permit more foreign-earned income to be excluded. Nomads or expats should reevaluate what income qualifies and if housing cost limits are exceeded.
- **Monitor AMT Thresholds**: The higher AMT exemption for singles ($90,100) may mean fewer filers trigger AMT. If you’ve been close in past years, tax modelling may reveal you’re now under.
## Practical Examples
- A married couple filing jointly with $33,000 in itemized deductions in 2025 gets $31,500 deduction (standard) vs itemized. In 2026, if they still have $33,000 deductions, the standard deduction is $32,200—thus they still itemize with only a small margin.
- An expat earning $130,000 abroad in 2025 would have excluded only $130,000. In 2026, if foreign income is $132,900, they can exclude the full amount under the new limit.
## Actionable Advice
1. Begin tracking your itemizable expenses now to see if you'll benefit in 2026 compared to taking standard deduction.
2. If you work abroad, keep precise records of income and housing expenses to justify FEIE claims.
3. Estimate AMT risk before year-end; consider accelerating or deferring income or deductions to manage exposure.
**Bottom line:** The 2026 inflation-indexed adjustments aren’t merely clerical—they shift the tax planning landscape. Those who anticipate and adjust could realise meaningful savings.