The Complete OBBBA 2026 Tax Changes Guide

Eight Provisions, One Law: What OBBBA Actually Changed

The One, Big, Beautiful Bill Act (OBBBA), signed July 4, 2025, is the single biggest source of new federal tax rules taxpayers will see on their 2025 and 2026 returns. Rather than one change, it's eight separate provisions bundled into one law -- each with its own eligibility rules, dollar caps, and income phase-out, which is exactly why "one big beautiful bill tax changes summary" is one of the most-searched tax questions right now. This site has a dedicated, IRS-sourced calculator for all eight:

1. No Tax on Tips -- up to $25,000/year deduction for tipped workers
2. No Tax on Overtime -- up to $12,500 (single) / $25,000 (joint) for the FLSA overtime premium
3. Car Loan Interest Deduction -- up to $10,000/year on new, US-assembled vehicle loans
4. Enhanced Senior Deduction -- up to $6,000/person ($12,000/couple) for taxpayers 65+
5. SALT Deduction Cap -- raised from $10,000 to $40,400 (2026)
6. Charitable Deduction Calculator -- a new $1,000/$2,000 deduction for non-itemizers, plus a new 0.5%-of-AGI floor for itemizers
7. QBI (Section 199A) Deduction Calculator -- the 20% business-income deduction, made permanent with wider phase-in ranges
8. Trump Account Growth Calculator -- a new tax-deferred account for kids, seeded with $1,000

Our in-depth explainer on the tips, overtime, car loan, and senior deductions covers those four provisions' mechanics in full detail, including every IRS worked example. This guide takes a different angle: it's the decision framework for figuring out which of the eight actually apply to your household, and how they interact when more than one does.

The Four Temporary Deductions at a Glance

Tips, overtime, car loan interest, and the senior deduction share a common structure -- each is claimed on the new Schedule 1-A, available whether you itemize or take the standard deduction, and only available for tax years 2025 through 2028 -- but each has its own cap and its own MAGI phase-out range, so qualifying for one doesn't tell you anything about the others:

No Tax on Tips -- up to $25,000; phases out starting at $150,000 MAGI (single) / $300,000 (joint); fully gone at $400,000 / $550,000
No Tax on Overtime -- up to $12,500 (single) / $25,000 (joint); phases out starting at $150,000 / $300,000; fully gone at $275,000 / $550,000
Car Loan Interest -- up to $10,000; phases out starting at $100,000 / $200,000; fully gone at $150,000 / $250,000
Enhanced Senior Deduction -- up to $6,000/person; phases out starting at $75,000 / $150,000; fully gone around $175,000 / $250,000

Notice the car loan interest deduction phases out at a much lower income than tips or overtime -- a household earning $180,000 could fully qualify for the tips and overtime deductions while getting zero car loan interest deduction. There's no rule against claiming multiple deductions in the same return: a 66-year-old restaurant server who financed a new car in 2025 could potentially claim tips, the senior deduction, AND car loan interest on the same Form 1040, each measured against its own threshold independently.

The SALT Cap Increase Reaches Much Higher Incomes

The SALT (State and Local Tax) deduction cap works on an entirely different income scale than the four deductions above. It rose from a flat $10,000 to $40,000 for 2025, indexed 1%/year to $40,400 for 2026 ($20,200 married filing separately) -- and its phase-out doesn't even start until $505,000 MAGI (single or joint) / $252,500 (MFS), reduced 30 cents per dollar above that, never falling below the old $10,000/$5,000 floor. That threshold is dramatically higher than any of the four deductions above, which means a high earner who's completely phased out of the tips, overtime, car loan, and senior deductions can still benefit substantially from the higher SALT cap -- these provisions target very different income bands, not the same taxpayers. The SALT increase is also on its own temporary clock: it steps up 1%/year through 2029, then reverts to a flat $10,000 for everyone in 2030 absent further legislation. Run your own itemize-vs-standard comparison with the SALT Deduction Cap Calculator, and see our property tax deduction guide for how it interacts with mortgage interest and other itemized deductions.

Charitable Giving Rules: A New Deduction for Everyone, A New Floor for Itemizers

Starting with tax year 2026, OBBBA changed charitable-giving tax rules in two directions at once -- one that helps most donors and one that quietly shrinks the benefit for others. First, 26 U.S.C. Section 170(p) creates a brand-new permanent deduction for taxpayers who do NOT itemize: up to $1,000 of cash gifts to a qualifying public charity ($2,000 on a joint return), added on top of the standard deduction. That cap does not halve for married filing separately the way the SALT cap does -- only joint filers get the doubled $2,000 amount. Gifts to donor-advised funds or supporting organizations don't qualify.

Second, Section 170(b)(1)(I) adds a new 0.5%-of-AGI floor for itemizers: your itemized charitable deduction is only allowed to the extent your cash giving exceeds 0.5% of your AGI. A donor with $100,000 AGI, for example, loses the first $500 of any charitable deduction to this floor -- a change that gets far less attention than the SALT cap or "no tax on tips" headlines but affects a much larger population of ordinary itemizing donors.

Because one of these provisions helps non-itemizers and the other shrinks the benefit for itemizers, the right move depends entirely on which bucket you're in. Run both scenarios side by side with the Charitable Deduction Calculator, which also estimates your real dollar tax savings rather than just comparing raw deduction totals. If you're 70½ or older, also check whether a Qualified Charitable Distribution (QCD) from an IRA beats either path -- a QCD moves money directly from your IRA to charity, counts toward your Required Minimum Distribution, and isn't affected by the new 0.5% floor at all since it's never counted as income in the first place.

QBI (Section 199A): Not New, But Now Permanent -- and Wider

Unlike the other seven provisions in this guide, the Section 199A Qualified Business Income (QBI) deduction isn't new -- it's existed since the original 2017 Tax Cuts and Jobs Act, letting owners of sole proprietorships, partnerships, S-corporations, and other pass-through businesses deduct up to 20% of their qualified business income. What OBBBA changed is that Section 199A was scheduled to expire after tax year 2025; the law made it permanent and widened its phase-in ranges for 2026: the taxable-income threshold where wage/UBIA limits and the SSTB (specified service trade or business) phase-out begin now runs $201,750-$276,750 for single/head-of-household filers and $403,500-$553,500 for joint filers (per IRS Rev. Proc. 2025-32). OBBBA also added a new guaranteed $400 minimum deduction for taxpayers who materially participate in a qualified trade or business with at least $1,000 of QBI, even if the regular 20%-of-QBI calculation would produce less.

Because QBI runs on business taxable-income thresholds rather than the MAGI phase-outs used by the individual deductions above, a small-business owner should check it independently of the others -- a self-employed tipped worker, for instance, could potentially claim the No Tax on Tips deduction on their W-2 wages AND a separate QBI deduction on unrelated pass-through business income in the same year. Run your own numbers, including the wage/UBIA limitation and SSTB phase-out, with the QBI (Section 199A) Deduction Calculator.

Trump Accounts: The One OBBBA Provision With No Income Limit

Every provision above has an income ceiling -- Trump accounts (IRC section 530A) don't. Any child born in the United States can have a Trump account opened for them, and there's no MAGI test on who can contribute to one, unlike every deduction described above. Children born 2025 through 2028 also receive a one-time $1,000 federal "pilot program" seed deposit automatically. From there, family, friends, and the child can contribute up to a combined $5,000/year (employer contributions count toward, not on top of, that same limit, capped separately at $2,500/year and excluded from the parent's taxable income), invested in a low-cost fund tracking a broad U.S. stock index, growing tax-deferred until the account converts to an ordinary traditional IRA at 18.

This makes Trump accounts the one piece of OBBBA that a family locked out of every income-limited deduction above -- because their MAGI is too high -- can still use in full. Project your child's balance at 18 (and an illustrative projection through retirement) with the Trump Account Growth Calculator.

Putting It Together: A Decision Framework for Your Household

Because each provision has its own income scale, the right approach is to check them independently rather than assuming one answer applies to all eight:

If you're a tipped or hourly worker: start with tips and overtime -- these have the highest phase-out thresholds of the four temporary individual deductions, so most tipped and hourly workers will qualify for at least a partial deduction. Remember: only the FLSA overtime *premium* counts, not your full overtime paycheck, and FICA (Social Security/Medicare) tax still applies to all of it.

If you financed a new vehicle in 2025 or later: check the car loan interest deduction next, since its $150,000/$250,000 phase-out ceiling is the lowest of the four -- moderate earners who fully qualify for tips or overtime may still get a partial or zero car loan interest deduction.

If you or your spouse turned 65 by the end of the tax year: layer the enhanced senior deduction on top of your existing age-65+ standard deduction addition -- these stack rather than replace each other.

If you itemize deductions and live in a high-property-tax state: re-run your itemize-vs-standard comparison even if you haven't itemized in years -- the SALT cap increase alone can flip that decision for households well above the income levels where the other four deductions disappear.

If you give to charity: check both the new non-itemizer deduction and the new 0.5%-of-AGI floor on the itemized side -- one of them almost certainly applies to you, and which one is better depends on whether your total itemized deductions (including your capped SALT amount) beat the standard deduction.

If you own a small business, freelance, or have pass-through (Schedule C/K-1) income: run the QBI deduction separately from every provision above -- it uses its own taxable-income thresholds, not MAGI, and isn't reduced by claiming any of the individual deductions.

If you have (or are expecting) a child born 2025-2028: open a Trump account regardless of your income -- it's the only provision here with no income test at all, so it's available to every household reading this guide.

Every one of these eight calculators uses the same 2026 IRS-verified figures cited above -- run your own numbers with each linked tool rather than assuming a single headline dollar figure applies to your specific situation.