Wait, is the IRS actually going away? If you’ve been scrolling through social media lately, you might have seen some pretty wild headlines claiming that federal income taxes are about to become a thing of the past. It sounds like a dream, right? No more April 15th stress, no more withholding from your paycheck, just... nothing.
But here’s the reality: no, Trump is not getting rid of federal taxes. Honestly, the truth is a lot more complicated than a "yes" or "no" answer. While there has been some big-talk about replacing income tax with tariffs, what’s actually happening on the ground—especially with the passing of the One Big Beautiful Bill Act (OBBBA)—is a massive restructuring of how we pay, not an end to paying altogether.
The Tariff Talk: Can We Really Replace Income Tax?
During the campaign and even into 2025, the idea of a "tax-free America" fueled by tariffs was floated. The logic sorta goes like this: if we charge a 10% or 20% "toll" on everything coming into the country (and maybe 60% on stuff from China), we’ll have so much cash that we won't need to tax people’s salaries.
It's a bold pitch. But if you look at the numbers, it’s a tough sell. In 2024, the federal income tax brought in about $2.4 trillion. To get that much money from tariffs, you’d have to tax imports so heavily that a $20 toaster might suddenly cost $60. Experts like Steve Ellis from Taxpayers for Common Sense have been pretty blunt about it, saying it’s just not "remotely possible" to swap one for the other without crashing the economy.
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So, while the 10% universal tariff is very much alive, it’s being used to offset tax cuts, not to eliminate the tax man entirely.
What’s Actually Changing in 2026?
If you're looking for the real "tax news," you have to look at the One Big Beautiful Bill Act. This is the legislation Trump signed on July 4, 2025, and it’s what actually dictates what you’ll owe when you file in 2026.
Basically, it took the old 2017 tax cuts (the TCJA) and made them permanent. If this hadn't happened, your taxes probably would have spiked this year. Instead, we’re looking at a world of higher deductions and some very specific "no-tax" zones.
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The Big Wins for Regular People
- No Tax on Tips and Overtime: This is a huge one. If you’re a waitress or a construction worker putting in 50 hours a week, that extra money is now largely deductible. For 2026, you can deduct up to $12,500 in overtime income.
- The Senior Bonus: If you’re over 65, there’s a new $6,000 deduction just for you. It starts to phase out once you make over $75,000, but for most retirees, it’s a massive break.
- Standard Deduction Jump: For 2026, the standard deduction is moving up to $16,100 for singles and $32,200 for married couples. Most people won't even need to itemize anymore.
The New Brackets
You still have seven tax brackets. They haven't gone anywhere. For the 2026 tax year, the rates stay at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The only thing that changes is the "inflation adjustment," which means you can earn a bit more money before you get pushed into a higher percentage.
The "Trump Accounts" and Child Credits
There’s a new thing coming in July 2026 called Trump Accounts. Think of it like a government-backed savings account for kids. The government puts in a one-time $1,000 contribution for eligible children, and parents can add up to $5,000 a year tax-free.
And for parents, the Child Tax Credit is sticking around at $2,200 per child. It’s not the $5,000 some were hoping for, but it is higher than it used to be.
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Why You Might Feel Like You're Paying Less (Even if Taxes Aren't Gone)
The reason people think is Trump getting rid of federal taxes is because of how the "take-home pay" is changing. Starting in early 2026, the IRS is finally adjusting the withholding tables.
For the last year, a lot of people were paying the lower rates but didn't see it in their paychecks—they just got a big refund at the end of the year. Now, that money is going to stay in your paycheck every Friday. It’ll feel like a tax disappearance, even if the bill is just being settled differently.
Practical Steps to Take Now
Don't just wait for your W-2 to arrive next year. The rules are different now, and you need to pivot.
- Track your Overtime: Since overtime is now deductible up to $12,500, make sure your paystubs clearly separate your "base" from your "OT." If your employer lumps them together, the IRS won't know the difference, and you'll lose the break.
- Look into "Direct Primary Care": Starting in 2026, you can use HSA funds to pay for direct primary care fees. This is a massive shift for people who hate traditional insurance.
- Check your SALT limits: If you live in a high-tax state like New York or California, the "SALT" deduction cap actually went up to $40,000 for the next few years. This is a huge change from the old $10,000 limit.
- Buy American (for the car credit): There is a new $10,000 deduction for interest on car loans, but only if the vehicle was assembled in the U.S. and purchased after 2024.
The federal income tax isn't dead. It's just wearing a very different outfit than it was a few years ago.