Big news for taxpayers: Several major provisions from the 2017 Tax Cuts and Jobs Act (TCJA) have just been made permanent, thanks to the recently signed Big Beautiful Bill. These changes impact everything from tax brackets and deductions to credits and estate planning. Whether you’re a homeowner, a parent, or just someone trying to stay ahead of tax season, here’s what you need to know.
Tax Brackets Are Here to Stay…. Sort Of
The tax bracket structure from 2017 is staying in place. That means low earners will continue to pay 10%, while high earners remain in the 37% bracket. However, not all brackets will continue adjusting for inflation. Over time, this could result in “bracket creep,” where you end up in a higher tax bracket even if your real income hasn’t grown.
Mortgage Interest Deduction: Lower Cap Becomes Permanent
Homeowners, take note: The mortgage interest deduction is now permanently capped at $750,000 of mortgage debt for joint filers ($375,000 for single filers). Before 2017, that cap was $1 million—so this change is a solid reduction in how much interest you can write off.
SALT Deduction Gets a Temporary Boost
The State and Local Tax (SALT) deduction is temporarily increasing from $10,000 to $40,000 for most filers, but only through 2029. After that, it reverts back to the $10,000 cap permanently.
- For those filing separately, the temporary limit is $20,000, dropping to $5,000 in 2030.
- If your income is over $500,000, the deduction begins to phase out sooner.
Standard Deduction Increase Locked In
The standard deduction, which was doubled under TCJA, is now locked in and will continue to rise with inflation. In 2026, it increases to $15,750 for single filers and $31,500 for joint filers.
Gift and Estate Tax Exclusion Rises
Planning your estate? The lifetime gift and estate tax exclusion is rising to $15 million for individuals and $30 million for couples. These thresholds will adjust with inflation going forward, offering more flexibility for high-net-worth individuals and families.
Child Tax Credit Is Permanently Higher
Starting in 2025, the Child Tax Credit will be permanently increased to $2,200 per child. Of that, $1,700 is refundable. This is a notable jump from the pre-TCJA credit of just $1,000.
New Charitable Giving Rules
There’s now a permanent benefit for non-itemizers:
- $1,000 deduction for single filers
- $2,000 for joint filers, applicable to cash donations.
For those who do itemize:
- You’ll reduce your deduction by 0.5% of your AGI.
- If you’re in the top tax bracket, your charitable deduction is now capped at 35% (down from 37%).
The Personal Exemption Is Gone for Good
Previously suspended by the 2017 law, the personal exemption is now permanently repealed. That means you can no longer claim deductions for yourself, your spouse, or dependents via the old exemption rule.
What This Means for You
These changes officially take effect for the 2026 tax year. While some updates offer benefits—like a larger standard deduction and Child Tax Credit—others could complicate your long-term tax planning. The elimination of the personal exemption, tighter mortgage interest rules, and phased-out SALT deductions mean that strategic planning is more important than ever.
If you’re unsure how these changes will affect your return or financial goals, now’s the time to consult your tax professional or financial advisor.
