Taxes are personal. They’re also, honestly, a giant headache for most of us. But with the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, the landscape for the "Trump tax cuts" has shifted from a looming expiration date to a permanent reality for many.
You’ve probably heard the talking points. One side says it’s a windfall for the wealthy; the other says it’s a turbo-boost for the middle class. The reality? It’s kinda both, depending on where you sit on the income ladder and how you earn your money.
Basically, the 2017 Tax Cuts and Jobs Act (TCJA) was a ticking time bomb. Most of its individual provisions were set to vanish at the end of 2025. This new legislation basically defused that bomb by making the lower rates permanent, while adding some new "sweeteners" that change the math for 2026 and beyond.
So, Who Will Benefit From Trump Tax Cuts the Most?
If we’re looking at the raw numbers, the biggest winners are the folks at the very top.
Data from the Institute on Taxation and Economic Policy (ITEP) suggests that in 2026, the richest 1% of Americans will snag an average tax cut of about $66,000. That’s a massive chunk of change. To put it in perspective, that single group is projected to receive more in total tax cuts than the bottom 60% of the country combined.
Why such a huge gap? It’s not just one thing. It’s a combination of lower top-tier brackets, the massive Section 199A pass-through deduction, and the way the Alternative Minimum Tax (AMT) was overhauled.
The Pass-Through Jackpot
If you own a business that isn't a C-corp—think S-corporations, partnerships, or just being a sole proprietor—you probably love the pass-through deduction. It allows you to deduct 20% of your qualified business income right off the top.
For a high-earning business owner, this is huge. It effectively drops their top tax rate from 37% to 29.6%. Since the OBBBA extended this, business owners avoid a massive "tax cliff" that would have hit them on January 1, 2026.
The "No Tax on..." Provisions
The 2025 law added some new categories that sound great on a bumper sticker. "No tax on tips" and "no tax on overtime" were big campaign promises that actually made it into the bill.
If you’re a server in Vegas or a construction worker pulling 60-hour weeks, this is a win. But there’s a catch. These benefits are mostly for people who already don't pay a ton in federal income tax because their earnings are lower. The Yale Budget Lab notes that nearly half of all households will see an additional tax cut of less than $100 from these new features. It’s help, sure, but it’s not exactly a life-changing windfall for most.
The Middle Class Shuffle: Standard Deductions and SALT
For the average family making, say, $75,000 to $130,000, the benefit is real but a bit more subtle.
The standard deduction is staying high. For the 2026 tax year, it’s hitting $32,200 for married couples filing jointly. That keeps millions of people from having to deal with the nightmare of itemizing their receipts.
Then there’s the SALT deduction (State and Local Taxes). This was a huge sticking point for years. The $10,000 cap was basically a middle finger to high-tax states like New York and California. The new law bumped that cap up to **$40,000 for married couples**, though it starts to phase out if you make more than $500,000.
If you live in a suburb with high property taxes, this is probably the part of the bill you’ll actually feel in your bank account.
Seniors Get a Bonus
One surprising addition in the OBBBA is a new deduction specifically for those 65 and older. It’s an extra $6,000 deduction on top of the standard one. If you’re a retired couple both over 65, you’re looking at a massive chunk of income—over $44,000—that the IRS won't even touch.
The Corporate Side of the Coin
While the individual cuts were the ones that almost expired, the corporate tax rate was already permanent at 21%.
The 2025 law didn't just leave it there; it doubled down on business incentives. It brought back "bonus depreciation," which allows companies to write off the full cost of new equipment immediately rather than over several years.
Critics, like those at the Economic Policy Institute, argue this mostly benefits shareholders and foreign investors. They point out that foreign investors—who own a lot of US stock—will actually see more benefit from these cuts than the bottom 40% of American taxpayers.
What Most People Get Wrong About These Cuts
A common misconception is that "tax cuts" mean everyone’s bill goes down.
Actually, for some people at the very bottom, taxes might stay the same or even feel higher. Why? Because the bill let some healthcare tax credits expire. If your insurance premiums go up because those credits are gone, a $50 tax cut doesn't really help you.
Also, there’s the "Tariff Factor." President Trump’s administration has been heavy on import taxes. Many economists argue that these tariffs act like a consumption tax. If you save $400 on your income tax but spend $600 more on groceries and electronics because of tariffs, you haven't really "benefited" in a way that helps your budget.
Actionable Steps: How to Position Yourself
Since the rules are now set for the next several years, you can actually plan. Here’s what you should probably do:
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- Check Your Withholding: With the new 2026 brackets and deductions (like the senior bonus or the $40k SALT cap), you might be overpaying the IRS every month. Use the IRS's updated withholding estimator to see if you can take home more in your paycheck.
- Look into "Trump Accounts": These are new tax-advantaged savings accounts for minors coming in 2026. They'll have a $1,000 government contribution to start. If you have kids, keep an eye on when banks start opening these.
- Evaluate Business Structure: If you’re a freelancer or small biz owner, the permanent 20% pass-through deduction makes staying a "pass-through" entity very attractive. Talk to a CPA to see if you're maximizing this.
- Charitable Bunching: The new law allows a $1,000 above-the-line deduction for donations even if you don't itemize. If you plan on giving more than that, consider "bunching" two years of donations into one tax year to get over the standard deduction threshold.
The "Trump tax cuts" are no longer a temporary experiment; they are the bedrock of the American tax code for the foreseeable future. Whether you think they’re fair or not, they’ve created specific "pockets" of opportunity. Finding those pockets—whether it’s the SALT expansion or the senior deduction—is the only way to make the math work in your favor.