On July 4th, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. Think of it as a complex sequel to the 2017 Tax Cuts and Jobs Act. Basically, it locks in a lot of tax breaks that were supposed to expire this year—and if they had, more than 60% of taxpayers would’ve seen their bills increase. With an estimated $3 trillion impact on the US budget deficit, the immediate impact on taxpayers is an average 2.9% increase in income in 2026. The bill is massive (over 1,000 pages long), so there’s no way to cover everything. But here are the highlights most likely to matter for everyday taxpayers like you.
Tax Rates
The OBBBA permanently extends the lower individual rates which would have expired at the end of 2025. The top tax rate for individuals remains at 37% compared to a scheduled increase to 39.6%.
Deductions
Standard Deduction (Permanent) – In 2026, the standard deduction goes up to $15,750 for single filers and $31,500 for married filing jointly. This simplifies filing and means fewer people will bother with itemizing.
Extra Deductions for Seniors (Temporary) – If you’re 65 or older, you may qualify for a new deduction of up to $6,000. The deduction is fully phased out at income levels of $175,000/$250,000 for single/joint filers and will expire after 2028.
Deductions for Auto Loans (Temporary) – New car owners are able to deduct up to $10,000 of interest on loans for US-assembled passenger vehicles. Like the senior deduction, this one also ends after 2028.
Charitable Contributions – Everyone now gets a $1,000 per person charitable deduction, even if you take the standard deduction. There’s also an extra $1,700 deduction for donations to scholarship-granting organizations for private or religious K-12 schools. But—new rule—for those who itemize, you can only deduct donations that go over 0.5% of your adjusted gross income.
Mortgage Interest – You can now deduct interest only on the first $750,000 of mortgage debt (down from $1 million).
State and Local Tax (SALT) Deduction Cap (Temporary) – The SALT deduction cap temporarily rises in 2025 to $40,000 for households making under $500,000. It returns to $10,000 in 2029. For higher earners, the cap is reduced but won’t go below $10,000.
Exemptions
Estate Tax (Permanent) -The exemption goes up to $15 million per person ($30 million per couple) in 2026 and will adjust for inflation going forward.
Alternative Minimum Tax (AMT) – The bill makes permanent the AMT exemptions that were about to expire. While some thresholds will be a little lower in 2026, most people will continue avoiding AMT altogether.
Families with Kids
Trump Tax-Deferred Child Savings Accounts – New tax-deferred accounts for kids are being rolled out. Parents (and employers) can contribute, and the government will kick in $1,000 for babies born 2025–2028. But compared to 529 plans, these accounts are more complicated and restrictive.
529 Plan K-12 Changes – Starting in 2026, families can use up to $20,000 per year from a 529 for K-12 expenses, not just private school tuition. Think tutoring, textbooks, testing fees, and even certain therapies.
Child and Other Dependents Tax Credits – The Child Tax Credit is now permanent at $2,200 per child, with inflation adjustments starting in 2026. The income phaseout starts at $200,000 for singles and $400,000 for couples. The $500 credit for other dependents also stays put.
Bottom Line
The OBBBA is mostly good news for individual taxpayers—it keeps rates low and adds or extends several deductions. Families with kids stand to gain from the expanded education savings options and permanent child tax credit.
As always, we’ll keep an eye on how these changes may impact your portfolio and financial planning. If you’re wondering how it applies to your personal situation, don’t hesitate to reach out—we’re here to help.
