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Here’s your potential tax cut in 2026 from the One Big Beautiful Bill Act
New federal legislation signed into law by President Trump is expected to bring significant tax cuts for millions of Americans. According to an analysis from the nonpartisan Tax Policy Center, taxpayers can expect an average reduction of approximately $2,900 per household in 2026.
This potential tax relief comes as a result of the One Big Beautiful Bill Act, which aims to extend previously implemented tax cuts and introduce new breaks for individuals and households. Among the changes is the elimination of taxes on overtime and tips, as well as an increase in the state and local taxes deduction from $10,000 to $40,000.
While the overall impact of these changes will be a substantial reduction in tax liability for millions of Americans, it’s essential to note that higher-income households are expected to benefit more significantly than lower-income ones. In fact, the top 20% of households (those earning over $217,000) can expect an average savings of approximately $12,540, or 2.5% of their income.
Conversely, those in the bottom quintile (those earning up to $34,600 per year) will only see an average reduction of about $150, or 0.8% of their income.
As individual results may vary based on factors such as the number of dependents and eligibility for certain tax credits, it’s crucial for taxpayers to understand the specifics of this new legislation and how they can best take advantage of these changes.
The One Big Beautiful Bill Act has already been signed into law by President Trump and is set to take effect in 2026.
Source: www.cbsnews.com
