President Donald Trump’s “One Big Beautiful” bill, signed into law on July 4, solidifies the president’s first-term tax cuts that are set to expire in 2025, while also introducing new tax cuts.
The Tax Foundation’s new calculator shows how this change will affect your 2026 tax bill and how much most households can expect to see their take-home income increase compared to if the previous tax cuts had expired.
A nonpartisan think tank estimates how the law will affect take-home pay in 2026. Total household income is shown in parentheses, and the percentage shows how much net pay will increase under the new law, reflecting all tax rate cuts, deductions, and deductions.
Up to $17,735: 2.6% increase in take-home pay $17,736 to $38,572: 5.2% increase in take-home pay $38,573 to $73,905: 5.7% increase in take-home pay $73,906 to $130,661: 6.3% increase in take-home pay $130,661 Above: 5.0% increase in take-home pay
The benefits are not evenly distributed. Upper-middle-income households will see the largest increase in take-home pay, while lower-income groups will see the smallest increase.
This increase also reflects new deductions and expanded deductions. The standard deduction increases slightly to $15,750 for single filers and $31,500 for married couples filing jointly, while the child tax credit increases slightly to $2,200 per child, both of which now automatically adjust for inflation.
Other changes include deductions for certain overtime pay, tip income, auto loan interest, and a temporary “senior bonus” for taxpayers age 65 and older. The state and local tax deduction limit would also increase from $10,000 to $40,000 for most households, but would be reduced for higher earners.
These changes are reflected in the Tax Foundation’s 2026 Calculator, which models the new law using its own estimates of inflation and deduction thresholds. The calculator allows you to test different household situations by selecting the (Create a custom scenario) option under the 2026 Tax Calculator heading.
Here are some example scenarios of how taxpayers could fare in 2026 under the new law.
Single, income $30,000: Tax reduction of $752 (2.9% take-home pay) Single, income $75,000: Tax reduction $3,378 (take-home pay 5.6%) Single parent, two children, income $52,000: Tax reduction $1,861 (take-home pay 3.8%) Married couple, two children, income $85,000: Tax reduction of $2,474 (3.3% increase in take-home pay) Married couple with 3 children, income of $200,000: $8,487 tax reduction (take-home pay increase of 5.3%)
However, tax cuts come at a cost. The federal deficit is expected to increase by at least $3.4 trillion over the next 10 years, according to the Congressional Budget Office.
These deficits alone have further increased the national debt, which is now over $36 trillion, up from about $23 trillion at the beginning of 2020. This is an increase of more than 50% in five years, mainly due to pandemic relief, increased social program costs and continued government borrowing.
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