The One Big Beautiful Bill rewrote large parts of the tax code for 2026, and most explainers either bury you in numbers or oversell it as a blanket win. This is the version that tells you exactly which bucket you fall into.
Start here: are you itemizing or taking the standard deduction?
This single question determines which parts of this guide actually apply to you. For 2026, the standard deduction is $32,200 (married filing jointly), $16,100 (single), and $24,150 (head of household), with extra amounts for filers 65+. Roughly 90% of taxpayers take the standard deduction — if that's you, skip the SALT section below entirely; it's irrelevant to your return.
Permanent changes vs. temporary ones — the distinction that actually matters
The single most important framework for understanding this bill: some changes are now permanent law, and some are temporary provisions running only through 2028. Confusing the two leads to bad five-year planning.
Permanent: the seven TCJA tax brackets (10% through 37%), the higher standard deduction baseline, the larger $15 million estate tax exclusion, and 100% bonus depreciation for businesses.
Temporary (2025-2028 only): the no-tax-on-tips deduction (up to $25,000), the no-tax-on-overtime deduction, and the $6,000/$12,000 senior bonus deduction. All three phase out at higher income levels and could simply expire after 2028 without further legislation.
If you earn tips or overtime
Both new deductions are above-the-line, meaning you claim them whether you itemize or take the standard deduction — genuinely useful design. Both are subject to income phaseouts, and both use the new Schedule 1-A form introduced specifically for these OBBBA deductions. Don't assume your employer's payroll system automatically applies this correctly; verify your W-2 and any 1099 income is categorized in a way that lets you claim it.
If you're 65 or older
You likely qualify for two separate age-based benefits: the existing additional standard deduction for seniors ($2,050 single / $1,650 per spouse joint), plus the new $6,000 senior bonus deduction ($12,000 for a qualifying couple) introduced by OBBBA. The bonus deduction phases out starting at $75,000 MAGI (single) or $150,000 MAGI (joint) and disappears above that. You must turn 65 by December 31 of the tax year to qualify — there's no partial-year credit.
If you live in a high-tax state and itemize
The SALT deduction cap jumped from $10,000 to $40,000 (joint) / $20,000 (single) — but only if you itemize, and only fully if your MAGI is under $500,000. Above that, the benefit phases down and disappears entirely by $600,000 MAGI, returning you to the old $10,000 cap. This provision is squarely aimed at upper-middle-income homeowners in high-tax states like California, New York, and New Jersey — it does little for either lower earners (who take the standard deduction anyway) or the very highest earners (who get phased out of it).
If you're self-employed or freelance
Two changes matter here. First, the Form 1099-K reporting threshold has dropped to $5,000 in gross payment volume through third-party platforms like Venmo, PayPal, and similar apps — expect more of your income to be formally reported this year even if your business is small. Second, Solo 401(k) and SEP-IRA contribution limits have risen alongside standard retirement accounts, giving self-employed filers more room to shelter income. For the deadline mechanics and how to avoid penalties, see our full quarterly estimated taxes checklist.
If you're saving for retirement
- 401(k)/403(b)/457 limit: $24,500 for 2026, plus $8,000 standard catch-up for 50+.
- "Super catch-up" for ages 60-63: an additional $11,250 under SECURE 2.0.
- IRA limit: $7,500, plus $1,100 catch-up for 50+.
- Watch this one: if you earned over $150,000 in 2025, your 2026 catch-up contributions must go into a Roth account — pre-tax catch-up is no longer available at that income level.
If your estate planning involves real money
The lifetime estate and gift tax exclusion is now $15 million per person, $30 million per married couple with proper portability. This is a meaningful jump from the prior $13.99 million figure, and worth revisiting with an estate attorney if your estate is anywhere near these thresholds — especially given the same temporary-provision uncertainty affecting the rest of this bill beyond 2028.
The single biggest mistake people make with this bill: assuming every provision applies to them, or assuming every provision is permanent. Neither is true. Figure out which specific buckets above actually describe your situation, and ignore the rest — that's the entire guide in one sentence.
For the news-cycle version of this same breakdown with more color on why each piece was written the way it was, read our full OBBBA explainer.