Money is moving. If you’ve been watching the news lately, you know the tax code just got a massive facelift. People are calling it the "One Big Beautiful Bill" (OBBB), and honestly, it’s a lot to take in. It isn't just a simple extension of the old 2017 rules. It's a complete overhaul that's going to hit your wallet differently starting right now.
Basically, if you were worried about your taxes skyrocketing when the old Trump cuts expired, you can breathe a little. The 2025 legislation made most of those individual cuts permanent. But there's a catch. Or rather, a dozen small catches hidden in the fine print that change everything from how you report your Side Hustle income to how much you can deduct for that new SUV.
The 15% Corporate Dream and Manufacturing
One of the loudest parts of Trump's new tax plan is the push for a 15% corporate tax rate.
Wait. Didn't we already have a flat 21% rate?
Yeah, we did. But the new goal is a targeted 15% rate specifically for companies that "make their product in America." It’s basically a massive carrot on a stick for domestic manufacturing. Experts like those at the Tax Foundation and Penn Wharton Budget Model have been crunching these numbers for months. They estimate that if this is applied broadly, it could cost the government anywhere from $460 billion to $670 billion over a decade.
But here’s the nuance: it might not be a "flat" 15% for everyone. Lawmakers are looking at reviving something similar to the old "Section 199" domestic production deduction. It’s a bit of a bureaucratic headache, but it basically allows a company to slice off a portion of their taxable income if they can prove the widgets were built in a U.S. factory.
Your New 2026 Brackets (The Real Numbers)
Let’s talk about you. The IRS just dropped the official inflation adjustments for 2026, and they’ve baked in the OBBB changes. The standard deduction is jumping again. For a married couple filing jointly, you’re looking at $32,200. If you’re single, it’s $16,100.
The tax rates themselves—those seven famous brackets—are staying at the lower TCJA levels: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
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But check this out. The "One Big Beautiful Bill" actually gave a bigger inflation boost to the bottom two brackets. They got a 4% bump, while the higher brackets only moved up about 2.3%. It’s a subtle way of keeping more of the lowest-earning Americans in those 10% and 12% zones even if their wages go up a bit with inflation.
The SALT Cap Surprise
Remember the $10,000 SALT cap? The one that everyone in New York and California absolutely hated?
Well, it’s gone. Sorta.
Under the new plan, the State and Local Tax (SALT) deduction cap has been raised to $40,400 for 2026. This is a huge deal for homeowners in high-tax states. But don't get too excited if you're a high-roller; this cap starts phasing back down to the old $10,000 limit once your income hits $505,000.
Honestly, it’s a middle-class play. If you make $150k and have a big property tax bill, you’re winning. If you’re making $2 million, the "haircut" on itemized deductions will probably leave you exactly where you were before.
Tips, Overtime, and the "Trump Account"
This is where the plan gets kind of wild. There are two brand-new deductions that haven't really existed in this form before:
- No Tax on Tips: Service workers can now deduct up to $25,000 of qualified tips. If you’re a waiter or a bartender, this is a game changer.
- Overtime Deduction: You can now deduct up to $12,500 ($25,000 for couples) of "qualified overtime compensation."
Then there’s the Trump Account. It’s basically a new type of IRA for kids under 18. Starting July 4, 2026, the government is supposed to kick in a one-time $1,000 contribution for eligible children, and employers can add up to $2,500 a year tax-free. It’s like a 401(k) but for a toddler, and it has to be invested in U.S. stock indices like the S&P 500.
The Tariff Factor: The "Invisible" Tax
We can't talk about Trump's new tax plan without mentioning tariffs. This is where it gets controversial.
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The administration has been pushing for a 20% universal tariff on imports and a 60% (or higher) tariff on anything from China. Economists at the Bipartisan Policy Center and ITEP are sounding the alarm here. Why? Because tariffs are technically a tax paid by the people importing the goods.
If a 20% tariff hits your favorite brand of coffee or your next laptop, the company usually just passes that cost to you. Some analysts think this could cost the average household around $1,400 in 2026. So, while your income tax might go down because of the higher standard deduction, your "consumption tax" through higher prices might eat up those savings. It's a balancing act.
Side Hustles and the 1099-K
If you sell stuff on eBay or drive for Uber, you’ve probably been sweating the 1099-K rules. The old plan was to trigger a tax form at just $600 in sales.
The new plan killed that.
For the 2025 tax year (the forms you’ll get in early 2026), the threshold is back up to $20,000 and 200 transactions. This is a massive relief for casual sellers who just want to clean out their garage without getting a headache from the IRS.
Actionable Next Steps for Your 2026 Taxes
- Review your W-4: With the new overtime and tip deductions, you might be over-withholding. Talk to your payroll person about adjusting your Form W-4 so you don't give the government an interest-free loan until next year.
- Check your SALT strategy: If you’ve been taking the standard deduction because of the old $10k cap, it’s time to run the numbers on itemizing again. With a $40,400 cap, you might actually save more by listing your property taxes and mortgage interest.
- Prep for the Trump Account: If you have kids, look for the July 4 rollout. Getting a $1,000 head start from the feds on a retirement account is a rare "free money" moment.
- Watch the Tariffs: If you’re planning a major purchase—like a car or heavy appliances—keep an eye on trade news. If a new round of 20% tariffs hits, those prices will jump almost overnight. Buying sooner rather than later might be the smartest "tax move" you make.
The reality is that Trump's new tax plan is designed to reward domestic work and domestic manufacturing. Whether you're a server taking home cash tips or a factory owner in Ohio, the code is leaning heavily into your favor, while simultaneously asking consumers to pay a bit more for imported goods. It’s a messy, complicated, and bold shift in how America handles its money.