The One Big Beautiful Bill Act (OBBBA) reshaped the individual tax landscape. It locked in the rates and the larger standard deduction most people are used to, and it added several new breaks — some of which already touched 2025 returns, with most taking full effect in 2026. If you file a personal return, here's what changed and where the planning opportunities are.

The familiar framework is now permanent

The seven tax brackets created in 2017 (topping out at 37%) are permanent, as is the increased standard deduction. The personal exemption stays suspended. In practical terms, the return you've grown used to isn't reverting to the pre-2018 version — that uncertainty is gone.

The SALT cap quadrupled — temporarily

This is the headline for California homeowners. The cap on deducting state and local taxes rose from $10,000 to $40,000, in place from 2025 through 2029 (indexed modestly each year), then scheduled to revert to $10,000. The benefit phases down for high earners. For anyone who has been losing most of their California income and property taxes to the old $10,000 ceiling, this reopens real deduction room — and makes the timing of deductible payments worth planning rather than leaving to chance.

A bigger child tax credit

The child tax credit increased to $2,200 per qualifying child for 2026 and is now indexed for inflation, with phase-outs that begin around $200,000 for single filers and $400,000 for joint filers.

New deductions for tips, overtime, seniors, and car loans

OBBBA introduced four new deductions, generally effective for 2025 through 2028, and several are available whether or not you itemize:

• Tips — a deduction for qualified tip income in occupations that customarily receive tips.

• Overtime — a deduction for the premium portion of overtime pay, up to $12,500 ($25,000 for joint filers), phasing out at higher income.

• Seniors — an additional $6,000 deduction for taxpayers 65 and older, phasing out above $75,000 ($150,000 joint).

• Car loan interest — a deduction of up to $10,000 of interest on a loan for a U.S.-assembled vehicle, for loans originated after 2024, with income limits.

Each carries its own eligibility rules and income phase-outs, and they generally require a valid Social Security number — so whether they help you specifically is a question worth checking, not assuming.

Charitable giving rules shifted in both directions

Starting in 2026, people who take the standard deduction can again deduct a limited amount of cash charitable giving — up to $1,000 ($2,000 for joint filers) — without itemizing. At the same time, those who do itemize face a new floor: only charitable contributions above 0.5% of adjusted gross income count. Both changes make when and how much you give in a given year worth coordinating.

Watch the AMT if you're a higher earner

The larger alternative minimum tax exemption was preserved, but beginning in 2026 the exemption phases out at lower income thresholds and at a faster rate. If you have a high income or exercise incentive stock options, the AMT deserves a second look this year.

The California asterisk

California doesn't follow the federal rules here. The state has no SALT cap on your California return, and it treats several of these new federal deductions differently or not at all. Your federal and California outcomes can move in opposite directions, which is exactly why coordinating both returns together matters.

The takeaway: 2026 brought more deduction opportunities than most years, but several are temporary and income-limited, which makes timing the lever. The people who benefit most are the ones who plan before December 31 rather than discovering the rules at filing time.

If you'd like a clear read on which of these apply to you, start with my individual tax intake or schedule a consultation.