What OBBBA Changes on Your 2026 Tax Return

Educational guide, not tax advice — every figure below is imported from this site's sourced data file or computed by the same tested engine that powers the calculators, and was verified against primary sources (the enacted statute, the Internal Revenue Code, Rev. Proc. 2025-32, and IRS guidance) as of 2026-08-18. Federal income tax only, tax year 2026.

The One Big Beautiful Bill Act — P.L. 119-21, enacted in 2025 — changed a long list of individual federal income tax rules, and tax year 2026 (the return you file in 2027) is when most of its individual provisions are fully in place. This guide covers the five changes this site now has dedicated calculators for: the $6,000 senior deduction, the $40,400 SALT cap, the car-loan interest deduction, the higher standard deduction, and the reworked charitable deduction. For each, the verified numbers — and an honest note about what expires when.

First, the form change everything hangs on: Schedule 1-A

Three of the new deductions — senior, car-loan interest, and the non-itemizer charitable deduction — are claimed on the new Schedule 1-A and flow to Form 1040 line 13b. That placement matters more than it sounds: line 13b sits after adjusted gross income, so these deductions reduce taxable income but never reduce AGI or MAGI. Despite what many summaries say, they are not "above-the-line" — a mislabel with real consequences, because AGI and MAGI control IRA limits, ACA credits, IRMAA surcharges, and the phase-outs of these very deductions. Each phase-out below uses a MAGI computed without the new deductions (MAGI here means AGI plus foreign-income amounts excluded under IRC §§911, 931, and 933 — for most people, MAGI equals AGI; the MAGI Calculator covers the definitions). The upside of the design: the senior and car-loan deductions are available whether or not you itemize.

1. The $6,000 senior deduction (age 65+)

Taxpayers who are 65 or older by year-end get a deduction of $6,000 per qualified person (IRC §151(d)(5)) for tax years 2025–2028. It phases out at 6% of MAGI above $150,000 (joint) or $75,000 (all others), applied to each person's $6,000 separately. Married filing separately gets $0, each qualified person needs a Social Security number on the return, and the amounts are not inflation-indexed. Computed example: a single 68-year-old with $100,000 of MAGI keeps $4,500 of the $6,000 — the phase-out takes $1,500. This is a third layer on top of the base standard deduction and the separate age-65 add-on, not a replacement for either. Run your own numbers in the Senior Bonus Deduction Calculator.

2. The SALT cap: $40,400, a phase-down, and a floor

The state-and-local-tax deduction cap for 2026 is $40,400 (IRC §164(b)(7) — the dollar amounts are written into the statute, not IRS inflation figures). Above $505,000 of MAGI the cap phases down at 30% of the excess, but it never falls below a $10,000 floor — high earners never lose the deduction entirely, a commonly misread detail. Computed example: a couple with $550,000 of MAGI paying $45,000 in state and local taxes gets a cap of $26,900. Married filing separately gets half of everything: a $20,200 starting cap, a $252,500 threshold, and a $5,000 floor. The SALT deduction only matters if you itemize. The cap and threshold rise about 1% per year through 2029; exact 2028–2029 dollar amounts have no statutory rounding rule — awaiting IRS guidance. From 2030 the cap reverts to a flat $10,000 with no phase-down — that cliff is the original OBBBA design, not a later amendment. Details in the SALT Deduction Cap Calculator.

3. Car-loan interest: up to $10,000, with strict gates

For tax years 2025–2028, interest on a qualifying vehicle loan is deductible up to $10,000 per year (IRC §163(h)(4)) — whether or not you itemize, via Schedule 1-A. The gates are strict: a new vehicle (used never qualifies), personal use, final assembly in the United States, a first-lien purchase loan originated after 2024, and the VIN reported on your return; leases never qualify. The phase-out is a staircase, not a line: the deduction drops $200 for each $1,000 of MAGI — or any portion of one — above $200,000 (joint) or $100,000 (others), so a single dollar over a step costs the full $200. That ceiling rule also means the deduction hits $0 above MAGI of $249,000 joint / $149,000 others — not the rounder figures many sites publish. Computed example: a single filer with $112,500 of MAGI who paid $10,000 of qualifying interest deducts $7,400. Check your eligibility gate by gate in the Car Loan Interest Deduction Calculator.

4. The standard deduction: higher, permanent — and already included

OBBBA made its standard-deduction increase permanent, and the 2026 figures published in Rev. Proc. 2025-32 already reflect it: $32,200 married filing jointly (and qualifying surviving spouses), $24,150 head of household, $16,100 single and married filing separately. The most common mistake in 2026 planning content is adding a separate "OBBBA boost" on top of those figures — that double-counts, because the revenue procedure explicitly incorporates the statute. Age-65 and blindness add-ons still stack on top, and the senior deduction above stacks separately again: computed for a couple who are both 67, the standard deduction alone is $35,500 ($32,200 base plus $3,300 of age add-ons) before the senior deduction is even counted. The 2026 Standard Deduction Calculator handles all the layers; the full bracket tables live in the 2026 tax brackets guide.

5. Charitable giving: new rules on both sides of the itemizing line

Non-itemizers get a permanent deduction for cash gifts to public charities — up to $1,000, or $2,000 on a joint return (IRC §170(p)) — with gifts to donor-advised funds and supporting organizations excluded. Computed: a couple giving $3,000 in cash deducts $2,000. Itemizers face a new 0.5%-of-AGI floor: at $200,000 of AGI, the first $1,000.00 of giving produces no deduction, so $10,000 of gifts yields $9,000.00. And for 37%-bracket taxpayers, the rewritten IRC §68 trims all itemized deductions by 2/37 of the excess — capping the benefit of a marginal deducted dollar at 35 cents. Both forks, with the floor and carryforward math, are in the Charitable Deduction Calculator.

What expires after 2028 — and what is permanent

Temporary (2025–2028): the $6,000 senior deduction and the car-loan interest deduction both apply only to tax years 2025 through 2028, and neither is inflation-indexed while it lasts. The related tips and overtime deductions (which predate this guide's five and have their own calculator) run on the same 2025–2028 clock. On its own schedule: the SALT cap — small statutory increases each year through 2029, then the flat $10,000 cliff in 2030. Permanent: the standard-deduction increase, the non-itemizer charitable deduction, and the seven-rate bracket structure itself (P.L. 119-21 §70101); the charitable floor and the §68 haircut take effect for 2026 with no scheduled end date in the provisions.

How current is this page?

Every constant behind this guide carries a primary-source citation — the enacted statute at govinfo.gov, the amended Internal Revenue Code, Rev. Proc. 2025-32, and IRS newsroom and topic guidance — and the set was last verified on 2026-08-18. Two honest caveats. First, "no later legislation has changed these provisions" is an absence-of-evidence conclusion: Congress can amend P.L. 119-21 at any time, and this site re-checks before each deploy. Second, some 2026 forms and instructions (including the final Schedule 1-A instructions) were still pending as of that date; details that depend on them are flagged inside the calculators rather than papered over.

Frequently asked questions

Not tax advice: an educational overview of federal income tax changes for tax year 2026 (returns filed 2027) — no state or local taxes, no AMT modeling, no NIIT, and no advice about what you should do. Worked figures are computed at build time by the same tested engine as the calculators, so this page cannot drift from the tools. Consult a tax professional or IRS.gov for your situation. See the methodology page.