2026 Tax Law Changes

One Big Beautiful Bill Act (OBBB): Key Tax Changes for Individuals, Families, and Businesses in 2026 and Beyond

August 2026 – By Lee Generous, ChFC®, EA | Founder, Generous Wealth Management LLC

On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was signed into law. This major legislation makes many of the 2017 Tax Cuts and Jobs Act (TCJA) provisions permanent, introduces new temporary deductions, and creates additional planning opportunities for individuals, families, and small businesses.

Some changes took effect immediately or in 2025, while others begin in 2026. Temporary provisions expire after 2028, so timely action may be required. The IRS continues to issue implementation guidance. Always consult your tax, legal, or accounting professional before making decisions based on these updates.

At Generous Wealth Management LLC, our team helps clients understand how new tax laws interact with their overall financial, tax, and estate plans.

Individual Taxes

Tax Brackets The current marginal rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) have been made permanent. Without the OBBB, most rates were scheduled to rise after 2025. Status: Permanent.

Standard Deduction (2026)

Single: $16,100
Married Filing Jointly: $32,200
Head of Household: $24,150

These amounts are indexed for inflation in future years. Effective: 2026 (building on 2025 permanent increases).

Bonus Deduction for Seniors Taxpayers age 65 and older may claim an additional $6,000 deduction (in addition to the standard deduction).

Phase-out begins at $75,000 (single) / $150,000 (joint).
Fully phases out above $175,000 (single) / $250,000 (joint). Status: Temporary — expires after 2028.

State and Local Tax (SALT) Deduction The SALT cap rises to $40,400 in 2026 and increases 1% annually through 2029. It reverts to $10,000 in 2030. Phase-out begins for incomes above approximately $505,000. Status: Temporary higher cap through 2029.

Charitable Contributions Taxpayers who take the standard deduction may now deduct up to $1,000 (single) or $2,000 (joint) in charitable contributions without itemizing.

Families & Children

Child Tax Credit $2,200 per qualifying child in 2026, with annual inflation adjustments going forward. Status: Permanent (with COLA).

Dependent Care Dependent care FSA limit increases to $7,500 starting in 2026. The maximum percentage of expenses eligible for the dependent care credit also rises.

“Trump” Account A new savings vehicle provides a one-time $1,000 government contribution for children born between 2025 and 2028. Parents may contribute up to $5,000 per year. Withdrawals generally restricted until age 18.

529 Plans Expanded coverage for certain non-tuition K–12 expenses. The annual limit for tuition-related K–12 expenses increases to $20,000 beginning in 2026.

New Deductions for Workers (Temporary — Expire After 2028)

No Tax on Tips: Deduction of up to $25,000 in tip income (above-the-line). Phase-out begins above $150,000 (single) / $300,000 (joint).
No Tax on Overtime: Deduction of up to $12,500 (single) or $25,000 (joint) of overtime pay. Same phase-out thresholds.
New Car Loan Interest: Deduction of up to $10,000 in interest on loans for brand-new, U.S.-assembled vehicles (2025–2028). Phase-out begins above $100,000 (single) / $200,000 (joint).

Small Business & Investors

Qualified Business Income (QBI) Deduction The 20% deduction for sole proprietors, partnerships, and S corporations is now permanent. Status: Permanent.

Expensing of Capital Investments 100% bonus depreciation restored for qualifying property placed in service on or after January 19, 2025.

1099-K Reporting Threshold reset to $20,000 and 200 transactions for third-party payment platforms.

Estate & Gift Taxes

Increased Exemptions Beginning in 2026, the estate and gift tax exemption rises to $15 million per individual ($30 million for married couples), with annual inflation adjustments thereafter. Status: Permanent (with COLA).

This removes the previous uncertainty about a potential sunset of higher TCJA-era exemptions.

Key Takeaways for Planning

Temporary provisions (senior bonus, tips, overtime, car interest) expire after 2028 — plan while they are available.
Inflation-adjusted items (standard deduction, Child Tax Credit, estate exemption) will change each year.
The IRS continues to issue guidance; strategies may evolve.

Why Partner with Our Tax-Smart Fiduciary Team?

How you manage taxes throughout the year directly affects your cash flow, penalties, and overall wealth. At Generous Wealth Management LLC, our entire team specializes in delivering tax-efficient, holistic strategies tailored for business owners, entrepreneurs—including those in the cannabis/hemp industry—and high-net-worth families. Led by founder Lee Generous (ChFC®, EA), a fiduciary with deep expertise in financial planning, tax advisory, portfolio strategy, and business succession since 2004, we bring together a dedicated group of professionals: seasoned tax advisor John Sardoni (CPA with 20+ years in audit, accounting, financing, and tax, plus Series 65), wealth facilitators William P. Kelly (CPA with decades of market experience rooted in academic research-based investing), and Casey Phinney (Boston College graduate with real estate and management background), supported by operational experts John Garrity (Suffolk University finance graduate) and Madeline Velasquez (Northeastern University accounting and finance graduate). This collaborative team coordinates directly with your CPA—or provides integrated tax advisory—to evaluate how OBBB provisions affect your situation and implement personalized strategies that often save clients far more than the cost of comprehensive planning.

The One Big Beautiful Bill Act creates both permanent certainty and time-sensitive opportunities. A proactive review can help you maximize benefits while staying compliant.

Ready to discuss how these changes apply to you? Contact us for a complimentary consultation: Contact@GenWealthMan.com or (781) 242-5760.

Sources:

Congress.gov – H.R.1, 119th Congress (One Big Beautiful Bill Act)
IRS – Tax inflation adjustments for tax year 2026 and related guidance

This content is for general informational purposes only, based on sources believed reliable as of August 2026. Tax laws can change and the IRS continues to issue guidance. It is not intended to avoid any federal tax penalties. Consult a qualified tax, legal, or accounting professional for advice tailored to your situation. Generous Wealth Management LLC is a fee-only fiduciary; the opinions here are not a solicitation for securities or investment services.