The "One Big Beautiful Bill Act" (OBBBA) has reshaped the tax landscape for 2026 with significant increases in standard deductions. For single individuals, the deduction rises to $16,500 (from $15,700), and for married couples filing jointly, to $33,000 (from $31,400). These increases aim to partially offset inflationary pressure on middle-income taxpayers.
"Tax Intelligence: The enhanced standard deduction means more taxpayers will NOT need to itemize. If your itemized deductions (mortgage, SALT, charity) do not exceed $16,500 (individual) or $33,000 (couple), use the standard deduction."
Deduction Comparison: 2025 vs 2026
| Filing Status | 2025 | 2026 (OBBBA) | Additional Savings |
|---|---|---|---|
| Single | $15,700 | $16,500 | +$800 |
| Married Filing Jointly (MFJ) | $31,400 | $33,000 | +$1,600 |
| Head of Household (HoH) | $23,500 | $24,750 | +$1,250 |
| Seniors Over 65 (additional) | +$1,550 (single) / +$1,300 (MFJ) | +$1,600 (single) / +$1,350 (MFJ) | +$50 |
2026 Tax Brackets (Adjusted by OBBBA)
| Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 |
| 37% | Over $626,350 | Over $751,600 |
Key OBBBA Changes for 2026
- Elimination of tips from taxable income: Service workers can exclude tips from their federal taxable income (new)
- Adjusted SALT Cap: The state and local tax deduction cap (SALT) remains at $10,000 but adjustment proposals are under review
- Tax-free overtime: Overtime pay exempt from federal taxes for certain workers (in implementation phase)
Tax Resources
| Resource | Detail |
|---|---|
| IRS Free File | irs.gov/free-file (free filing if AGI < $84,000) |
| Withholding Calculator | irs.gov — Tax Withholding Estimator |
| VITA (Voluntary Assistance) | irs.gov — VITA (free in-person preparation) |
| IRS Publication 17 | Complete Individual Tax Guide |
"Immediate Action: Use the IRS Tax Withholding Estimator to adjust your W-4 withholding NOW based on the new OBBBA deductions. If too much is withheld, you are giving the government an interest-free loan."