Tax law changes can feel overwhelming, but the One Big Big Beautiful Bill Act (OBBBA) is set to reshape how Americans file their taxes starting in 2026. This legislation, passed in 2025, revives popular deductions, expands employer credits, and locks in pro‑growth measures that will affect families, businesses, and nonprofits alike.
Why the OBBBA Matters
For years, taxpayers have lived under a patchwork of temporary provisions from the 2017 Tax Cuts and Jobs Act (TCJA). Many of those benefits — like bonus depreciation, charitable deductions for non‑itemizers, and certain business credits — were set to expire in 2025. Families faced uncertainty about whether deductions would shrink, while businesses worried about losing incentives to invest.
The OBBBA was introduced to remove that uncertainty. By making key provisions permanent and adding new carveouts, the Act aims to simplify planning and encourage growth.
Before vs. After OBBBA
| Area | Before OBBBA (2025 rules) | After OBBBA (2026 rules) |
| Charitable Giving | Non‑itemizers could not deduct donations after 2021 | Deduction revived: $1,000 single / $2,000 married |
| Childcare Credits for Employers | Limited to $150,000, covering ~25% of expenses | Expanded to $500,000 ($600,000 small biz), covering 40–50% |
| Bonus Depreciation | Scheduled to phase down after 2025 | Made permanent at 100% |
| R&D Expensing | Required amortization over 5 years | Immediate expensing restored permanently |
| Tips & Overtime | Fully taxable | Certain exemptions introduced |
| Student Loans | PLUS loans available, multiple repayment plans | PLUS loans eliminated, borrowing caps, simplified repayment |
| Medicaid & Healthcare | ACA subsidies and Medicaid funding intact | $900B Medicaid cuts, new work requirements, reduced subsidies |
Key Tax Changes You’ll See in 2026
- Charitable Giving Deduction Returns: Up to $1,000 (single) or $2,000 (married filing jointly) in cash donations deductible even if you take the standard deduction.
- Employer Childcare Credits Expand: Credits rise to $500,000 ($600,000 for small businesses), covering 40–50% of eligible expenses.
- Permanent Expensing Rules: 100% bonus depreciation and R&D expensing locked in permanently.
- Everyday Relief: Exemptions for tips, overtime, and car loan interest.
Broader Economic Impact
The OBBBA is expected to reshape the U.S. economy in several ways:
- Growth Projections: Analysts at the Tax Foundation estimate the Act will increase long‑run GDP by about 1.2%.
- Federal Deficit: The same analysis warns the law could add $3 trillion to the deficit over the next decade, raising questions about long‑term fiscal sustainability.
- Nonprofits: Revived charitable deductions are expected to boost small‑dollar donations, strengthening community organizations.
- Businesses: Permanent expensing rules encourage reinvestment in equipment and technology, but compliance costs may rise as filings become more complex.
- Healthcare Providers: Medicaid cuts and new work requirements could strain safety‑net hospitals, especially in urban areas, while rural hospitals receive transition funding.
How to Prepare for 2026
Here are practical steps individuals, businesses, and nonprofits can take now:
- Plan Charitable Giving Early: Track donations and confirm they’re to qualified organizations. This ensures you maximize the revived deduction.
- Employers Should Review Benefits: Expanded childcare credits make it easier to offer family‑friendly perks that attract and retain talent.
- Invest Strategically: Businesses should take advantage of permanent expensing rules to reinvest in growth.
- Consult a Tax Professional: With new carveouts and layered credits, filings will be more complex. Professional guidance will help avoid costly mistakes.
- Nonprofits Should Ramp Up Outreach: With deductions back on the table, donor campaigns can highlight the tax benefits of giving.
FAQ on the One Big Beautiful Bill Act.
What is in the One Big Beautiful Bill Act?
The OBBBA makes permanent several TCJA provisions, revives charitable deductions, expands childcare credits, and introduces carveouts like “no tax on tips.”
Read more at Congress.gov bill page.
How will the One Big Beautiful Bill affect my taxes?
Expect new deductions for charitable giving, exemptions on tips and overtime, and higher standard deductions. Businesses benefit from permanent expensing and expanded credits.
See Tax Foundation analysis.
Did Trump support the Tax Cuts and Jobs Act?
Yes. President Trump signed the original Tax Cuts and Jobs Act (TCJA) in 2017 and later signed the OBBBA in 2025, which extends and makes permanent many TCJA provisions.
Background at White House archives on TCJA.
What changes does the Act make to student loans?
The OBBBA caps borrowing, eliminates PLUS loans, and simplifies repayment plans. These changes take effect July 1, 2026.
How does the OBBBA affect healthcare and Medicaid?
The Act includes over $900 billion in Medicaid cuts, new work requirements, and reduced ACA subsidies.
Final Thoughts
The OBBBA isn’t just another tax law — it’s a shift in how Americans give, earn, borrow, and access healthcare. By comparing the “before” and “after,” and looking at the broader economic impact, it’s clear that 2026 will bring both opportunities and challenges. Families, businesses, and nonprofits all stand to benefit if they plan ahead and take advantage of the new rules.
Take Action Now
The One Big Big Beautiful Bill Act is more than just tax reform — it’s a roadmap for how families, businesses, and nonprofits can thrive in 2026 and beyond. The choices you make today will determine how much you save, how much you give, and how well you position yourself for growth.
- Families: Start tracking charitable donations and plan ahead for deductions.
- Businesses: Review childcare credits and permanent expensing rules to maximize reinvestment.
- Nonprofits: Launch donor campaigns that highlight the revived tax benefits of giving.
Don’t wait until tax season catches you off guard. Begin preparing now, consult with Dacliche Concept Bookkeeping and Tax Services, your trusted tax professional and Enrolled agent, and make the OBBBA work for you.
Your strategy today becomes your savings tomorrow. Take the first step toward smarter taxes in 2026.