Special Series on the One Big Beautiful Bill Act (OBBBA)

The 2025–2026 tax season is shaping up to be one of the most significant in recent years. In July 2025, Congress passed and signed into law the One Big Beautiful Bill Act (OBBBA)—a sweeping piece of legislation that permanently reshapes major areas of individual taxation and introduces new planning opportunities for years to come.

Whether you are an individual taxpayer, retiree, or small business owner, these changes will directly impact how you prepare your tax return due April 15, 2026, and how you plan for the future.

This special article series breaks down the most important tax law updates under the OBBBA and explains what they mean for you—clearly, practically, and without unnecessary jargon.

Why the OBBBA Matters

Many of the tax provisions introduced under the Tax Cuts and Jobs Act (TCJA) were originally temporary and set to expire after 2025. The OBBBA steps in to make several of those rules permanent, while also introducing new enhancements aimed at reducing tax burdens—especially for individuals and families.

In this article, we focus on three major areas that affect nearly every taxpayer:

1. Individual income tax rates

2. The standard deduction

3. Personal exemptions

1. Individual Tax Rates: Stability and Long-Term Savings

Under the TCJA, individual tax rates were reduced and reorganized into seven brackets:

10%, 12%, 22%, 24%, 32%, 35%, and 37%

These rates applied from 2018 through 2025 and were scheduled to expire, which would have resulted in a return to higher pre-TCJA rates—including a top rate of 39.6%.

What changed under the OBBBA?

The OBBBA permanently extends the current tax rates, eliminating uncertainty for taxpayers and preserving the lower top rate of 37%.

In addition:

• All tax brackets will continue to be adjusted annually for inflation

• Technical tweaks within lower brackets may provide modest tax savings for lower- and middle-income taxpayers

Bottom line: Taxpayers can plan with confidence, knowing today’s tax rates are here to stay.

2. Standard Deduction: Bigger and Better

One of the most dramatic changes under the TCJA was the expansion of the standard deduction, which led millions of taxpayers to stop itemizing deductions altogether.

For context:

• In 2018, the standard deduction was nearly doubled

• By 2025 (with inflation adjustments), it reached:

  • $15,000 for single filers

  • $30,000 for married couples filing jointly

What’s new under the OBBBA?

The OBBBA not only preserves the higher standard deduction—it increases it further:

• $15,750 for single filers

• $31,500 for married couples filing jointly

New deduction for seniors

The law also introduces a temporary $6,000 deduction for senior citizens for tax years 2025 through 2028.

Important notes:

• This deduction is in addition to the existing extra standard deduction for taxpayers age 65 or older or who are blind

• Combined, seniors may see a meaningful reduction in taxable income

We’ll explore this new senior deduction in more detail in a future article in this series.

3. Personal Exemptions: Permanently Eliminated

For decades, personal exemptions allowed taxpayers to reduce taxable income for themselves, their spouse, and dependents. In 2017, each exemption was worth $4,050.

The TCJA suspended personal exemptions from 2018 through 2025, with plans to reinstate them in 2026.

What does the OBBBA do?

The OBBBA eliminates personal exemptions permanently.

While this may sound like a loss, it’s important to note:

• Higher standard deductions partially offset this change

•     Dependent status still matters for:

  • Child-related credits

  • Education benefits

  • Other tax provisions

Bottom line: Exemptions are gone for good, but dependents remain relevant for many tax benefits.

What This Means for You

The extensions covered in this article do not require immediate action. However, they are essential for smart tax planning, especially for:

• Individuals adjusting withholding

• Families planning deductions and credits

• Small business owners whose income flows through to personal returns

• Retirees and seniors seeking to maximize deductions

Understanding these rules now allows you to make better decisions—not just for the upcoming tax season, but for the years ahead.

Looking Ahead

This article is part of an ongoing series exploring the full impact of the OBBBA on taxpayers and tax professionals. Additional articles will cover:

• New credits and deductions

• Business-related changes

• Planning strategies under the new law

Stay tuned as we continue to break down what the OBBBA means for your taxes—and how to make the most of it.