It’s that time of year again! W-2s, 1099s, and mortgage statements have begun to hit your mailbox: a daily reminder that it is, once again, Tax Season.
Overall, it was a relatively quiet year on the tax front, with one big (beautiful) exception: The One Big Beautiful Bill Act (OBBBA), which passed in July, brought significant tax changes and made permanent some of the changes from the 2017 Tax Cuts and Jobs Act (TCJA).
So where will most Americans see changes on their tax return this year?
1. Standard Deductions Got a Boost
As is normally the case, the standard deduction has been updated for inflation, and the larger standard deductions from the TCJA are now permanent. For single filers, it’s now $15,750. If you’re filing jointly, you’re looking at a standard deduction of $31,500. So, for many of us, that means a bit more money staying in our pockets.
2. Tax Brackets Receive Their Annual Raise
The tax brackets have also been adjusted for inflation. The top tax rate remains at 37%, but the income thresholds have increased by about 2.7% on average. This is good news for those who received cost-of-living adjustments and raises last year.
3. IncreasedChild Tax Credit
The TCJA increase to the Child Tax Credit was made permanent by the OBBBA, with the maximum value also increasing to $2,200 per child (subject to income limitations) and refundable up to $1,400.
4. IRA Contribution Limitations Also See an Increase in 2026
Those making IRA contributions can save a little more this year. The 2026 IRA contribution limitation is $7,500, plus a $1,100 catchup contribution for those over 50. Defined contribution plans, including those with SEP IRAs may see a contribution maximum of up to $72,000.
5. Health Savings Account (HSA) Limits Bumped Up
Health Savings Accounts bear the unique title of being triple-tax-advantaged (tax-deductible contributions, tax-free growth, and tax-free qualified distributions) and are a popular savings vehicle for those with high-deductible insurance plans. For individual plans, the limit is now $4,400, and for family plans, it’s $8,750. Plus, if you’re 55 or over, you can contribute an extra $1,000 as a catch-up contribution.
6. SALT DeductionsIncreased
The OBBBA brought some changes to the State and Local Tax (SALT) deduction, namely raising the cap to $40,000 for both single and joint filers. That’s the cap for those with incomes under $500,000, with the cap gradually reducing based on income until it reaches $10,000 at $600,000 of income. This change in SALT limits could impact your decision to itemize vs. taking the standard deduction, and it can also be drastically impacted by your income.
7. Tax Savings on Tips and Overtime
The OBBBA also brought changes for certain workers who earn tips and those who work overtime. The income eligible for deduction on tips is capped at $25,000, and the limit for overtime is $12,500 for individuals and $25,000 for those filing jointly. Both benefits also begin to phase out at incomes above $150,000 ($300,000 filing jointly).
8. Trump Child Savings Accounts
The OBBBA created a new type of tax-deferred savings account for children under 18, known as a Trump Child Savings Account. You can contribute up to $5,000 per year (adjusted for inflation in the future), and your employer can contribute another $2,500 per year (counted towards the $5,000 limit). And for babies born between 2025-28, the federal government will make a one-time contribution of $1,000 to the account.
Talk to a Professional
Those weren’t the only tax changes brought on by the OBBBA. There are also savings to be had for child and dependent care, some tweaks to 529 plans, and other small changes that may affect your taxes in 2026 and beyond.
If you’re unsure how your tax situation could be impacted, please consult with your financial advisor. They are tracking these changes and will be able to provide guidance for your specific situation. As taxes become more complicated, having a trusted professional in your corner can help cut your taxes in the long run.
Debra Taylor is not registered with Cetera Wealth Services LLC. Any information provided by this individual is provided entirely on behalf of CWM, LLC and is in no way related to Cetera Wealth Services LLC or its registered representatives.
Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state’s 529 Plan.
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