Key Points
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The One Big Beautiful Bill Act has led to a number of key tax changes.
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The majority of taxpayers can expect a tax cut in 2026.
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It pays to work with a professional to maximize your personal tax savings.
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On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act into law. The OBBBA makes major changes to tax laws in the U.S, and those changes are going to leave most Americans with more money in their bank accounts.
In fact, according to the
Not every household is going to enjoy the same tax savings, though. While 85% of households are going to get a tax cut in 2026, this number is going down to 70% by 2030 as some of the rules in the OBBBA expire.
The amount of savings in the short-term is also going to vary based on many factors, including things like how much your household earns and what your income sources are. In general, though, here’s exactly how much you can expect to save based on your income.
This is how much you’ll save on your taxes under the OBBBA
According to the Tax Policy Center, this is the average savings based on your income:
- $0 – $34,600 in income: $150
- $34,601 to $66,800: $750
- $66,801 to $119,200: $1,780
- $119,201 to $217,000: $3,460
- $217,2017 and up: $12,540
- Top 1% (income of $1,149,000 and up): $75,410
Obviously, higher earners are going to benefit the most as they will enjoy the most significant savings. That’s not really a surprise, because the more someone makes, the more they tend to pay in taxes – so the more they can save when tax cuts happen. After all, if someone is already paying little or no income tax, there’s not much more to cut.
Still, the OBBBA will result in the majority of households keeping more money in their pockets instead of paying the IRS. Just 4% of all households are going to see taxes go up in 2026, although that could increase to around 10% in 2030.
How can you prepare for changes to your taxes?
When major tax laws change like this, it’s helpful to understand how your taxes may be affected. For example, this legislation not only made lower tax rates permanent, but it also locked in the larger standard deduction created in 2017 and provided many seniors with an additional $6,000 deduction.
Other changes include:
- The ability to deduct more state and local income tax (as much as $40K, up from $10,000)
- A new deduction for tax on overtime pay
- A new deduction for tax on tips
- A slightly higher child tax credit
- More options for withdrawals from 529 plans
- A new car loan interest deduction
At the same time, the bill repealed tax breaks for electric vehicles and for residential energy improvements effective next year. So if you were planning to take advantage of that savings, you may want to act before the end of the year.
Ultimately, the fact is that your taxes are going to look different in 2026. If you want to make sure you’re claiming the most tax breaks you can, a quick conversation with a financial advisor about optimizing your tax savings may be worth it, especially given how major the changes were with this new law.
The post This is Exactly How Much You Can Save on Your Taxes Thanks to the Big Beautiful Bill appeared first on 24/7 Wall St..
