NEW TAX LAW CHANGES FOR 2026 TAX RETURNS AND THEREAFTER

cpa1dev on December 4, 2025

As the TCJA changes were set to expire at the beginning of 2026, the 2025 One Big Beautiful Bill makes many of these once-temporary changes permanent. Much of what takes effect beginning in 2026 is, a permanent continuation of the TCJA of 2017.

While there are a handful of changes that are retroactive to 2025, most of the changes in the One Big Beautiful Bill take effect on January 1, 2026. Some are permanent, while others last a few years. In addition to the tax-year 2025 retroactive changes, 2026 and thereafter tax changes include many changes, including:

AMT

Makes the increase in the alternative minimum tax (AMT) exemption permanent; reverts AMT exemption phaseout thresholds to 2018 levels of $500,000 for single filers and $1 million for joint returns, indexed for inflation thereafter; increases the phaseout rate.

Increase of Estate Tax Exemption

Permanently increases the estate and lifetime gift tax exemption to an inflation-indexed $15 million for single filers, and $30 million for joint filers, beginning in 2026.

Above the Line Charitable Contributions

Creates a permanent $1,000 above-the-line deduction for charitable contributions ($2,000 for joint filers).

Limits on the Value of Itemized Deductions

Limits the value of itemized deductions to 35 cents on the dollar for taxpayers in the top tax bracket. 0.5 percent floor on charitable contributions in order to take them as an itemized deduction.

  • Elimination of Personal and Dependent Exemptions
  • Increased Standard Deductions
  • Increased Standard Deductions
  • Current Tax Brackets
  • Increased Child Tax Credit
  • $750,000 Deductible Personal Mortgage Limit
  • Limitation on Personal Casualty Losses, Miscellaneous Itemized Deductions, and Moving Expense Deduction for Most Taxpayers
  • Increased AMT Exemption
  • Deduction for Qualified Business Income (QBI) at 20%