Tax Planning
Tax Planning with OBBB: Maximizing Standard Deduction & Credits for 2026
With the One, Big, Beautiful Bill’s inflation adjustments for tax year 2026, many taxpayers should revisit their planning to optimize standard deductions, child credits, and more.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## Overview
The One, Big, Beautiful Bill Act (OBBB) introduced sweeping tax law changes, with many inflation-indexed adjustments kicking in for **tax year 2026**. As these affect tax returns filed in 2027, now is an ideal time to plan. Key changes include raised standard deductions, higher thresholds for child tax credit, and increased AMT exemption. ([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))
## What's New in 2026
| Item | 2025 Amount | 2026 Amount |
|---|---|---|
| Standard Deduction, Married Filing Jointly | $31,500 | $32,200 |
| Standard Deduction, Single | $15,750 | $16,100 |
| Standard Deduction, Head of Household | $23,625 | $24,150 |
| Estate Tax Exclusion | $13,990,000 | $15,000,000 |
| Maximum Child Tax Credit | $2,200 (becomes permanent) for 2026 begins | still $2,200, with future indexing ([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 (Unmarried individuals) | — | $90,100 (phase-out starts 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)) |
## What Taxpayers Should Do Now
- Determine whether you benefit more from itemizing versus taking the standard deduction under the new limits. For many, standard deduction is significantly more valuable now.
- If you expect charges such as state and local taxes, charitable contributions, or mortgage interest to exceed the new exception, gather records early.
- Review dependents and qualifying criteria; ensure children have valid Social Security Numbers before considering the Child Tax Credit.
- Investors or estate planners should recalibrate estate tax exposure given the jump in exclusion.
- Those near AMT thresholds should monitor income, deductions, and taxable events to avoid being surprised by the AMT phase-outs.
## Practical Example
Sarah and John are married filing jointly: their taxable income in 2026 is projected at $300,000. Under the higher standard deduction ($32,200), their taxable income drops significantly compared to 2025. If they otherwise expected itemizing deductions totaling $35,000, the benefit of itemizing must exceed the delta to justify foregoing the standard deduction. They may be better off taking standard and using extra funds for other tax‐efficient investments (e.g. retirement), especially given raised Child Tax Credit thresholds.
## Action Items Before Year-End
1. Estimate your 2026 income and deductions.
2. Project whether you'll hit AMT or qualify for enhanced credits.
3. Make charitable donations or capital investments if itemizing.
4. Use updated withholding calculator or reach out to your payroll provider to ensure proper withholding given the new standard deduction and credit amounts.
## Takeaway
The One, Big, Beautiful Bill’s adjustments for 2026 offer meaningful relief for many taxpayers. By **proactively planning** now, you can align your withholdings, deductions, and credits to your advantage, avoid surprises, and reduce tax liabilities as new thresholds take effect.
**Category:** Tax Planning