The One, Big, Beautiful Bill has a significant effect on federal taxes, credits and deductions for 2026. It was signed into law on July 4, 2025. Below are some of the more relevant provisions.  

For tax year 202 6 , the standard deduction will increase to $3 2 , 2 00 for married filing jointly, $1 6 , 1 50 for single and married filing separately and $2 4 , 150 for head of household.  

For 202 6, the top marginal tax rate will remain at 37%.  

Estates of decedents who pass away in 2026 have a basic estate tax exclusion of $15,000,000.  

Effective through 2028, individuals who ae age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the extra standard deduction currently in force. This deduction phases out for taxpayers with modified adjusted gross income over $75,000 f or single taxpayers and $150,000 for married. The taxpayer must be 65 on or before December 31.  

Effective through 2028, employees and self-employed individuals may deduct tips received in occupations deemed by the IRS as customary and ordinary. Maximum annual deduction is $25,000. For self-employed the deduction cannot be greater than the individual ’ s net income from the business that provided the tip income. Deduction phases out for taxpayers with modified adjust gross income over $150,000 for single taxpayers and $300,000 for married.  

Effective through 2028, individuals who received qualified overtime income may deduct the pay that exceeds their regular rate of pay. The maximum amount of overtime pay that may be deducted is $12,500 for single taxpayers and $25,000 for married.  

Effective through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle , provided the vehicle is purchased for personal use. Maximum annual deduction is $10,000 and the deduction phases out for taxpayers with modified adjusted gross income over $100,000 for single taxpayers and $200,000 for marked. Additionally the vehicle must have undergone final assembly in the United States.  

All of the new deductions are available for itemizing and non-itemizing taxpayers.  

The cap on State and Local Tax (SALT) deduction has been increased to $40,400 for 2026. In order to take the SALT deduction you must itemize deductions. T he $40, 4 00 SALT cap shrinks by $0.30 for every $1 of income above $50 5 ,000 MAGI in 2025 , falling to a $10,000 floor once income hits $600,000. The phase-out hits single and married-joint filers at the same $500, 5 00 trigger, and the whole break sunsets after 2029.  

All clean vehicle tax credits expired on September 30, 2025.  

How quickly the time goes; we are almost at the end of another year. Happy Thanksgiving to all our clients, providers and friends. We appreciate the opportunity to serve your financial needs.