One Big Beautiful Bill
6 questions
-
Can I deduct auto loan interest in 2026?
Yes, for the first time since the 1980s. The One Big Beautiful Bill Act created a federal deduction of up to $10,000 per year on interest paid on qualifying personal-use vehicle loans for tax years 2025 through 2028. The vehicle must be new (you must be the original user), have a gross weight rating under 14,000 pounds, undergo final assembly in the United States, and be financed by a loan originated after December 31, 2024. The deduction phases out for modified adjusted gross income above $100,000 (single) or $200,000 (married filing jointly).
-
What are the 2026 federal tax brackets?
The U.S. uses seven progressive federal tax brackets for 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Brackets are inflation-adjusted from 2025 and remain at the rates set by the Tax Cuts and Jobs Act of 2017, which the One Big Beautiful Bill Act made permanent. Your top bracket is your marginal rate — the rate on your last dollar — not the rate on your entire income.
-
What is the new $6,000 senior deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of $6,000 per eligible filer ($12,000 for couples where both spouses are 65 or older) for tax years 2025 through 2028. It is available whether you itemize or take the standard deduction, but phases out for modified adjusted gross income above $75,000 (single) or $150,000 (married filing jointly). It is in addition to — not a replacement for — the existing extra standard deduction for filers over 65.
-
What is the no-tax-on-overtime deduction for 2026?
The One Big Beautiful Bill Act created a federal deduction of up to $12,500 per taxpayer ($25,000 for joint filers) on the qualifying overtime portion of wages — the half-time premium above your regular pay rate, not your full overtime hours. The deduction phases out for MAGI above $150,000 (single) or $300,000 (married filing jointly), applies to tax years 2025 through 2028, and only counts overtime required by the Fair Labor Standards Act.
-
What is the no-tax-on-tips deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of up to $25,000 per taxpayer on qualified tip income for tax years 2025 through 2028. The deduction is available whether you itemize or take the standard deduction, but phases out for taxpayers with modified adjusted gross income above $150,000 (single) or $300,000 (married filing jointly), and applies only to occupations the IRS designates as customarily and regularly tipped.
-
What is the standard deduction for 2026?
The federal standard deduction for tax year 2026 is $16,100 for single filers and married filing separately, $24,150 for head of household, and $32,200 for married filing jointly. These amounts are inflation-adjusted from 2025 and were made permanent by the One Big Beautiful Bill Act, which prevented the scheduled reversion to lower pre-2018 levels. Filers age 65 or older receive an additional standard deduction on top of these amounts.