Patriot,

It may seem obvious to folks like you, but not everyone knows what’s on the line next year. Most may not even know taxes are changing.

The One Big Beautiful Bill Act (OBBBA) included seven major tax cuts that took effect for 2025:

1. Maximum child tax credit increase of $200
2. Standard deduction increase of $750 for single filers and $1,500 for joint filers
3. State and local tax (SALT) deduction cap increase to $40,000 for taxpayers earning under $500,000
4. New $6,000 additional deduction for seniors that starts phasing out when taxpayers make more than $75,000 ($150,000 joint)
5. New $10,000 auto loan interest deduction that starts phasing out when taxpayers make more than $100,000 ($200,000 joint)
6. New deduction for up to $25,000 in tip income that starts phasing out when taxpayers earn more than $150,000 ($300,000 joint)
7. New deduction for up to $12,500 in overtime income ($25,000 for joint filers) that starts phasing out when taxpayers earn more than $150,000 ($300,000 joint)

Tax Foundation estimates that, altogether, these seven provisions cut individual income taxes by $129 billion in 2025. 

However, the OBBBA added significantly to the federal deficit, which was already on an unsustainable path. The insolvency of major entitlements like Social Security and Medicare is just a few years away. 

If you are wondering what this means for taxpayers in 2026, don’t worry, you’re not alone.

Tax Foundation is dedicated to helping taxpayers understand exactly what is happening in the world of tax policy and how it affects their daily lives.

I’m Daniel Bunn, President and CEO of Tax Foundation. Since 1937, our principled research, insightful analysis, and engaged experts have informed taxpayers and lawmakers about smarter tax policy in the US.

But to bring you the latest research, data, educational resources, and tax modeling you need to make informed decisions, Tax Foundation needs all the support it can get.

You can help Tax Foundation elevate the debate, enable deeper understanding, and achieve better, more principled tax policy by donating today.
 

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Our work doesn’t just inform taxpayers; it also provides lawmakers with ideas and justifications for the historically strong policies enacted in 2025, like the OBBBA, which included policies we’ve been educating lawmakers on for years.

Every day, our team of trusted experts continuously analyzes the day’s most relevant tax policy topics. They are routinely relied upon for presentations, testimony, and media appearances on tax issues spanning every level of government.

And when we have to, we are able to help lawmakers stand on their principles in the face of misguided proposals.

Tax Foundation’s job is to ensure solutions remain principled and pro-growth.

But we need your support to keep our foot on the pedal.

Your support will help us educate policymakers and the public on tax policies that lead to greater economic growth and opportunity. Click below to donate today.
 

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Thank you, 


Daniel Bunn
President and CEO
Tax Foundation


P.S. Tax Foundation is known for its research, data, tax models, and educational resources that make tax policy easy to understand, whether you’re a layman or a lawmaker. 

In 2025 alone: 

• Our experts had 96 meetings with US legislators and testified or presented to state lawmakers in 33 states.
• Journalists cited our work in over 68,000 stories.
• Over 15.4 million taxpayers visited our website.
• 411,000 people listened to our podcast.

When you invest in our work, you are supporting principled, data-driven analysis that makes a real difference for anyone who wants to boost their tax knowledge.

Will you please make a tax-deductible donation today to support our fact-driven work?
 

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Tax Foundation is a 501(c)(3) nonprofit educational organization. Any donations made to Tax Foundation are tax-deductible to the full extent allowable by law.