What the Tax Law Changes of 2025–2026Actually Mean for Your Paycheck
The New Landscape
Tax planning in April 2026 looks meaningfully different from just a year ago. The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, made permanent much of the Tax Cuts and Jobs Act framework that had been scheduled to sunset — and layered in several new provisions on top. The result: the feared 'sunset cliff' did not materialize, but there are still significant planning moves to understand right now.
What Changed — and What Stayed
The good news for most taxpayers: the lower TCJA brackets are now permanent. The top rate remains 37% rather than reverting to 39.6%. For a married couple earning $200,000, that's real money that stays in their pocket. The standard deduction was not only preserved but increased further. For 2026, married filers filing jointly now have a $32,200 standard deduction — up from $31,500 in 2025. Single filers get $16,100. These figures will continue to adjust for inflation annually. The estate tax exemption, another TCJA provision many feared would sunset, was made permanent and increased: the 2026 exclusion is $15,000,000 per person — a number that affects far fewer families than the pre-TCJA $5M threshold.
New Provisions Worth Knowing
The OBBBA introduced several new deductions that took effect in 2026. Seniors age 65 and older can claim a new 'bonus deduction' of $6,000 per taxpayer — available whether you itemize or take the standard deduction — though it phases out for income over $150,000 for joint filers. This is one of the most significant individual tax changes in years for retirees. The SALT cap also changed: for 2026 through 2029, itemizers can deduct up to $40,400 in state and local taxes (joint filers), a major shift from the $10,000 that had been in place since 2017. For clients in high-tax states like California, New York, or New Jersey, this is a conversation worth having now.
The Charitable Deduction Shift
Beginning in 2026, charitable giving rules changed under the OBBBA. For itemizers, only donations exceeding 0.5% of your AGI are fully deductible, and the tax benefit for high earners is capped at 35 cents on the dollar (down from 37). Non-itemizers, however, can now deduct up to $1,000 per filer ($2,000 for married couples) even without itemizing. These changes make tax-smart giving strategies — such as Qualified Charitable Distributions from IRAs and Donor-Advised Funds — more valuable than ever.
What Should You Be Doing Now?
The window of maximum flexibility is open today. Key moves to consider in April 2026: review whether the new SALT deduction makes itemizing worthwhile for the first time in years, assess whether the $6,000 senior bonus deduction applies to you or aging parents, revisit charitable giving strategies given the new deduction floors, and take stock of your Roth conversion plan with permanent lower brackets now confirmed. The clients who benefit most are those who act on new rules promptly rather than waiting until year-end.
Disclosure
Raymond James and its advisors do not offer tax or legal advice. Please consult the appropriate professional. Alternative investments involve specific risks that may be greater than those associated with traditional investments. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jim Maddux and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
