What the One Big Beautiful Bill Means for Your Taxes

Post #: 550Slug: one-big-beautiful-bill-tax-changes-2026Pillar: Business and Finance > Financial PlanningKeyword: one big beautiful bill tax changes 2026Tagline: Permanent cuts, new deductions — what changes for youExcerpt: The One Big Beautiful Bill Act was signed in July 2025 and brings major tax changes from 2026 onwards. Here's what it means for your take-home pay and filing.Date: 2026-06-16

What Is the One Big Beautiful Bill Act?

The One Big Beautiful Bill Act (OBBBA) was signed into law on 4 July 2025. It makes most of the 2017 Tax Cuts and Jobs Act provisions permanent and introduces several new elements. For most American households, the biggest practical effect is that the lower income tax rates and higher standard deduction from 2017 are now locked in rather than set to expire. Note: This article provides general educational information only. Tax law is complex and your individual situation may differ. Always consult a qualified tax professional or CPA for personal advice.

Key Changes Under the OBBBA

1. TCJA Rates Made Permanent

The seven income tax brackets from the 2017 TCJA — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — were previously scheduled to revert to higher pre-2017 rates after 2025. The OBBBA makes these rates permanent. For a median US household, this means no surprise jump in their effective tax rate from 2026 onwards.

2. Higher Standard Deduction Continues

The roughly doubled standard deduction introduced in 2017 remains in place and will continue to be adjusted for inflation annually. For 2026, the standard deduction for single filers is approximately $15,750 and $31,500 for married filing jointly. The majority of taxpayers will continue to find it advantageous to take the standard deduction rather than itemise.

3. Child Tax Credit Expansion

The OBBBA increases the Child Tax Credit above the current $2,000 per qualifying child. Phase-out thresholds are also adjusted to benefit more middle-income families. Check the IRS website for confirmed figures for the 2026 tax year.

4. SALT Deduction Cap

The $10,000 cap on State and Local Tax deductions was modified under the OBBBA. Higher-income taxpayers in high-tax states like California, New York, and New Jersey will want to review this change with a tax advisor, as the cap adjustment varies based on filing status.

5. Business Pass-Through Deduction

The 20% deduction for qualified business income under Section 199A for pass-through entities — sole proprietors, partnerships, S-corps, and LLCs taxed as pass-throughs — is now permanent. This is significant for self-employed individuals and small business owners.

What Should You Do Now?

• Review your W-4 withholding if your personal situation has changed
• If you are self-employed, review estimated quarterly payments in light of the permanent pass-through deduction
• Speak to a CPA if you live in a high-tax state about the SALT cap changes
• Update any long-term financial plans that assumed the TCJA provisions would expire

For further personal finance guidance, visit our Business and Finance section at eight2infinity.com/business-and-finance. For authoritative tax information, see irs.gov.

Frequently Asked Questions

Do I need to do anything differently when I file my 2026 taxes?

For most wage earners, no immediate action is required. Your employer will continue withholding based on your W-4. Review your withholding if you have had life changes such as marriage, a new child, or a major income change.

Does this affect my state taxes?

No — the OBBBA only governs federal tax law. State income taxes are set by each state independently. Check your state's revenue department website for specifics.

I am a freelancer — does the pass-through deduction apply to me?

It depends on your business structure and income level. Sole proprietors and single-member LLC owners may qualify for the 20% deduction on qualified business income, subject to income thresholds and service business restrictions. A tax professional can determine your eligibility quickly.

Will the OBBBA be repealed in future?

Congressional action could change any tax law. However, making provisions permanent rather than temporary raises the political bar for future changes significantly.

Where can I find the official text of the OBBBA?

The full legislative text is available at congress.gov and a consumer-friendly summary is published on irs.gov. Your CPA or tax software provider will also incorporate the changes automatically for 2026 filings.