🔑 1. Core Structure: TCJA Mostly Continues (with tweaks)

Originally, the TCJA was set to expire after 2025. However, new legislation kept most of its framework in place, meaning:

• The 7 tax brackets remain: 10%, 12%, 22%, 24%, 32%, 35%, 37% 

• No return of personal exemptions

• Lower marginal rates largely continue instead of reverting to pre-2017 levels 

👉 Bottom line: The feared “tax spike” in 2026 was largely avoided due to legislative changes.

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💰 2. Standard Deduction (Higher Again)

For 2026:

• $32,200 – Married filing jointly

• $16,100 – Single

• $24,150 – Head of household 

This continues the trend of making standard deduction the default for most taxpayers.

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👵 3. New / Expanded Deductions & Credits

Several new or enhanced provisions are expected:

✔️ Seniors deduction

• Around $6,000 additional deduction for age 65+ ​

✔️ Child Tax Credit (expanded)

• Increased from prior levels (exact amount depends on income phaseouts) ​

✔️ New deductions introduced:

• Tips income (partial exclusion)

• Overtime income (partial exclusion)

• Auto loan interest deduction

👉 These are politically targeted relief provisions and may be temporary.

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🎓 4. Education Tax Changes

• 529 plan withdrawals for K–12 expanded from $10,000 → $20,000/year

• Broader definition of qualified expenses (books, tutoring, etc.) 

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🏠 5. Itemized Deduction Changes

These matter more for higher earners:

• Charitable deduction floor: must exceed 0.5% of AGI

• High-income deduction cap: benefit limited to 35% tax rate

• New non-itemizer charitable deduction (~$1,000 / $2,000 joint) 

👉 Translation:

• Middle-income taxpayers benefit from new simplicity

• High earners lose some deduction value

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🏦 6. AMT, Retirement & Other Adjustments

• AMT exemption increases (e.g., ~$140K married) 

• IRA contribution limits rise (inflation-adjusted) 

• Foreign earned income exclusion increases (~$132,900) 

🏡 7. Estate & Gift Tax (Big Win for Wealth Transfer)

• Estate/gift exemption stays high (~$15M per person / $30M couple)

• Annual gift exclusion: $19,000 per recipient

👉 This avoids the major drop that was expected if prior law expired.

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⚠️ 8. What Didn’t Happen (Important Context)

If no law had passed, in 2026 you would have seen:

• Higher tax rates (e.g., 22% → 25%, 24% → 28%) 

• Lower standard deduction

• Return of personal exemptions

👉 Most of that did NOT occur due to legislative changes.

🧾 Bottom Line for 2026 Taxes (Filed 2027)

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👍 Likely positives:

• Higher standard deduction

• Expanded credits and targeted deductions

• Continued lower tax bracket structure

• Larger estate tax exemption

👎 Potential negatives:

• Reduced value of itemized deductions (especially for high earners)

• More complexity with new targeted deductions

• Some benefits may be temporary or income-limited​

📊 Practical Takeaway

For most taxpayers:

• Middle-income households → likely modest tax relief or neutral

• High-income taxpayers → mixed (lower rates preserved, but deductions limited)

• Seniors and wage earners with tips/overtime → potential new benefits

If you want, I can break this down specifically for your situation (income range, filing status, business vs W-2, etc.) and estimate whether your taxes go up or down in 2026.