What Trump’s New Tax Law Changes for 2026

The One Big Beautiful Bill Act is already altering the tax landscape, just months after becoming law. As Americans prepare to file taxes in 2026, the impact will depend largely on income, age, and how closely filers track the new rules.

The law extends key provisions of the 2017 Tax Cuts and Jobs Act, including wider tax brackets and a higher standard deduction. Most filers will benefit from the standard deduction rising to $16,100 for single taxpayers in 2026. Beyond that, many of the most meaningful changes target specific groups and add new complexity.

Key changes include:

• No tax on tips: Tipped workers can deduct up to $25,000 in tip income through 2028, with benefits phasing out above $150,000 in income. The IRS is temporarily using a more flexible definition of eligible tipped work.

• No tax on overtime: Eligible hourly workers can deduct up to $12,500 in overtime pay, but only the portion earned above their regular rate qualifies.

• Senior bonus: Taxpayers 65 and older can claim a $6,000 deduction ($12,000 for couples), though it phases out above $75,000 and is not directly tied to Social Security benefits.

The law also eases reporting for casual online sellers by keeping the 1099-K threshold at $20,000 and 200 transactions, avoiding a planned drop to $600.

Other notable changes include a higher $40,000 cap on the state and local tax deduction, a larger child tax credit of $2,200, and new tax-advantaged “Trump Accounts” for children. Additional provisions allow limited deductions for car loan interest and charitable donations without itemizing.

While the law expands tax relief for many Americans, it also introduces new eligibility rules and phaseouts, making careful tax planning more important than ever.