You’ve probably heard a dozen different versions of what’s actually happening with your money lately. One news cycle says you’re getting a windfall; the next says it’s all a corporate giveaway. It’s exhausting. Honestly, trying to figure out what is in the tax cuts feels like reading a manual for a flight simulator written in ancient Greek. But here’s the thing: the details matter more than the headlines because those details are exactly what determine if your April is going to be a celebration or a total nightmare.
Let’s get real.
Most people think "tax cuts" just means a lower percentage on a table somewhere in a government building. It’s way messier than that. We are looking at a massive shift in how the IRS views your kids, your mortgage, and even that side hustle you started during the pandemic. If you aren't paying attention to the specific provisions moving through the 2026 legislative cycle, you’re basically leaving a tip for the federal government that they didn't even ask for.
The Big Shift: Rates and Brackets
The meat of the conversation usually starts with the individual income tax rates. This is the part that affects almost everyone who receives a paycheck. Currently, we’re seeing a push to keep the lowered brackets that were originally established years ago, but with some aggressive adjustments for inflation. If these aren't extended or codified, we hit what's known as a "tax cliff."
Basically, your 12% bracket could jump back to 15% before you even realize what happened.
It isn't just about the top-line number, though. The standard deduction is the real hero for about 90% of Americans. When we talk about what is in the tax cuts, we have to talk about how the standard deduction has nearly doubled over the last decade. For 2026, the projections for a married couple filing jointly are hovering around $30,000. That is a massive chunk of income that the government just... ignores. It makes itemizing your taxes—counting up every single Goodwill receipt and mortgage interest payment—almost a waste of time for most families.
But wait. There's a catch.
While the standard deduction is high, the personal exemption is still gone. That’s the "give and take" nature of tax law that politicians rarely mention in stump speeches. They give you a bigger "free" bucket at the start, but they take away the per-person discount you used to get just for existing.
What Is In The Tax Cuts For Parents?
If you have kids, this is the section you actually care about. The Child Tax Credit (CTC) is the most volatile piece of the puzzle right now. We saw it expand during the pandemic, then shrink, and now the 2026 proposals are trying to find a middle ground.
Right now, the credit sits at $2,000 per child, but only a portion of that is "refundable." Refundable is just a fancy tax word that means "even if you owe zero taxes, the government will send you a check for the difference." There is a massive fight in D.C. right now about making the full $2,000—or even $3,000—fully refundable again.
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Think about it this way:
For a family with three kids, the difference between a non-refundable and a fully refundable credit can be the difference between a $0 tax bill and a $6,000 check in the mail. That isn't just "tax policy." That's a down payment on a car or six months of groceries.
Business Owners and the 199A Mystery
If you’re a freelancer, a contractor, or you own a small shop, you need to know about Section 199A. It’s arguably the most important part of what is in the tax cuts for the "gig economy" era.
It’s a 20% deduction for "qualified business income."
If you make $100,000 as an LLC, you might only get taxed on $80,000. It sounds like a cheat code, doesn't it? But it’s incredibly complex. There are phase-outs based on how much you earn and what kind of work you do. If you're a doctor or a lawyer, the government is way less generous with this deduction than if you run a construction company or a bakery. The 2026 debate is largely centered on whether this 20% "discount" should be permanent. Without it, millions of small business owners will effectively see a massive tax hike overnight.
The Corporate Side of the Coin
We can’t talk about what is in the tax cuts without mentioning the 21% corporate rate. Before the big shifts in 2017, this rate was 35%. That’s a huge gap. Critics argue this money just goes to stock buybacks. Proponents say it’s the only reason companies aren't moving their headquarters to Ireland or the Cayman Islands.
What’s interesting in the latest 2026 provisions is the focus on R&D (Research and Development) expensing.
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For a few years there, companies had to spread out their R&D deductions over five years. It was a nightmare for tech startups. The new tax packages are looking to bring back "immediate expensing." This means if a company spends $1 million developing a new software tool, they can deduct that whole $1 million the same year they spent it. It's a massive cash-flow win for the tech sector.
What Most People Miss: The SALT Cap
Living in California, New York, or New Jersey? Then you know the pain of the SALT cap. SALT stands for State and Local Taxes. Currently, you can only deduct up to $10,000 of your state and local taxes on your federal return.
If you pay $15,000 in property taxes and $10,000 in state income tax, you’re losing out on $15,000 worth of deductions because of that cap.
The debate over what is in the tax cuts often hits a wall here. Red states generally want to keep the cap because it prevents "subsidizing" high-tax blue states. Blue state representatives are fighting tooth and nail to raise it to $25,000 or scrap it entirely. If you're a homeowner in a high-tax area, this single line of code in the tax bill matters more to you than the actual income tax brackets. It’s the difference between a five-figure deduction and a four-figure one.
Practical Realities of the 2026 Proposals
Let’s look at a quick breakdown of how these pieces actually fit together for different people:
- The Single Renter: You’re mostly looking at the standard deduction and the 10% and 12% brackets. If those brackets stay put, your life doesn't change much. If they "sunset," you'll feel a pinch of about $1,000–$2,000 more in taxes annually.
- The Suburban Family: For you, it’s all about the Child Tax Credit and the SALT cap. If the CTC stays at $2,000 and the SALT cap stays at $10k, you're basically status quo. Any increase in the CTC is a direct win.
- The Side-Hustler: Section 199A is your lifeline. If you’re driving Uber or selling crafts on Etsy, that 20% deduction is what keeps your business viable.
The truth is, tax law is never settled. It's a living document that changes every time a new group of people gets the keys to the Capitol.
Why This Matters Right Now
You can't wait until April 2027 to worry about what is in the tax cuts of 2026. By then, it’s too late to move money around, contribute to your 401(k), or adjust your business spending. Tax planning is a year-round sport.
One of the biggest misconceptions is that the IRS is this static entity. It isn't. The IRS is a reflection of the current political will. Right now, that will is leaning toward "simplification" for individuals but "incentivization" for businesses. That sounds nice, but simplification usually means you lose specific deductions you liked in exchange for a slightly higher standard deduction.
Actionable Steps for the Tax Year Ahead
Don't just read this and move on. Taxes are the largest expense most Americans will ever have—bigger than their mortgage, bigger than their kids' college tuition.
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First, check your withholding. If the tax cuts go through and brackets change, your HR department might not update your paycheck immediately. You don't want to give the government an interest-free loan, but you also don't want a surprise bill. Use the IRS Tax Withholding Estimator; it’s actually a decent tool.
Second, track your business expenses now. If the R&D or 199A rules change, you need to have your books in order to take advantage of them the second they become law. Documentation is the only defense against an audit.
Third, re-evaluate your "big" purchases. If the SALT cap is going to be raised, it might finally make sense to buy that house you've been eyeing in a high-property-tax area. If it isn't, you might want to look across the state line.
Lastly, talk to a professional. Seriously. A good CPA costs a few hundred dollars but can save you thousands by finding the weird, obscure provisions in what is in the tax cuts that apply specifically to your weird, obscure life. Most people think they can just "TurboTax it," and for many, that's true. But the moment you own a home, have a kid, or earn a dollar outside of a W-2, the math changes.
The 2026 tax landscape is shifting fast. Stay on top of the bracket changes and the credit eligibility, because at the end of the day, it's your money. No one else is going to fight to keep it in your pocket for you.