The recently passed One Big Beautiful Bill Act (OBBBA) makes several key changes for individual taxpayers, many of which build on or make permanent provisions from the Tax Cuts and Jobs Act (TCJA). 

Accounting Today reports that one of the most significant updates is the extension of TCJA tax rates and brackets, removing the expected 2026 “sunset” that would have returned rates to pre-TCJA levels. This shift flips earlier tax planning strategies. Instead of accelerating income into 2025 in anticipation of higher rates, many taxpayers will now want to defer income and accelerate deductions. 

The bill also temporarily raises the state and local tax (SALT) deduction cap to $40,000 from $10,000 with a phaseout beginning at $500,000 of adjusted gross income. While this is a notable benefit for some, higher earners may see limited impact. Pass-through entity tax workarounds to the SALT cap remain available for eligible business owners. 

A new itemized deduction limitation now applies to taxpayers in the top 37 percent bracket, and potentially to estates and trusts, which reach that rate at much lower thresholds. High earners considering charitable contributions may benefit from making them before these rules take effect in 2026, especially with the introduction of a “charitable floor” that limits deductions until giving surpasses a set percentage of income. 

The OBBBA’s overtime tax deduction is also drawing attention. It applies only to the premium portion of overtime pay required under the Fair Labor Standards Act and excludes more generous state or employer policies. Employers will need to track and report qualified overtime separately, with IRS guidance still pending.