OBBBA Guidance on New Deductions [developing]
Key Questions
What are the standard deduction amounts for 2026 under OBBBA guidance?
The standard deduction for single filers is $16.1k, and for married filing jointly it is $32.2k. These amounts apply via Schedule 1-A as detailed in Rev Proc 2026-17 and Bulletin 2026-13.
What extra standard deduction is available for seniors in 2026?
Seniors receive an extra $6k standard deduction when receiving Social Security benefits. This is part of OBBBA changes with a 2.8% COLA, subject to a $184.5k cap and phaseouts.
How is Social Security taxation changing in 2026?
Up to 85% of Social Security benefits may become taxable under new rules. The SS Fairness Act addresses some inequities, and retirees should review RMDs and 401k traps to avoid costly mistakes.
What are the rules for the Roth backdoor contribution in 2026?
High earners can use the Roth IRA backdoor loophole, but contributions are subject to pro rata rules tracked on Form 8606. Fidelity highlights this as a key strategy for retirement growth.
What IRS scams should taxpayers watch for related to OBBBA?
The IRS warns of fake OBBBA calculators, ghost preparers, and AI-generated scam calls mimicking real voices for tax collection. Use official tools like the new W-4V, Estimator, or VITA for help.
Has digital asset tax relief been extended?
Notice 2026-20 extends digital asset relief through the end of 2026. Coinbase reports 51-74% unawareness among users, so taxpayers should stay informed.
What new deductions are available for tips, overtime, and car loans?
OBBBA introduces deductions up to $25k for tips and overtime via Schedule 1-A. Car loan interest may also qualify, benefiting middle-income and standard-deduction filers the most.
How does a dependent's W-2 affect the Child Tax Credit?
Parents should claim dependents with W-2 income for the CTC before filing. Early claims can boost refunds by up to 45%, especially for California W-2/1099 filers.
Rev Proc 2026-17/Bulletin 2026-13 detail OBBBA via Schedule 1-A: tips $25k/OT/seniors ($6k extra std ded w/SS 2.8% COLA/$184.5k cap, phaseouts, up to 85% SS taxable)/car loans/RMDs/401k traps/SS Fairness Act/Roth backdoor (pro rata/Form 8606)/dependent W-2 CTC; Notice 2026-20 extends digital asset relief end-2026 (Coinbase 51-74% unawareness). IRS scam alerts on fake OBBBA calculators/ghost preparers; new W-4V/Estimator/VITA help; std ded $16.1k/$32.2k; 45% early claims boost refunds for CA W-2/1099.