CNBC.COM
Republicans in the House of Representatives voted on Thursday to pass President Donald Trump's landmark budget legislation, meeting a self-imposed deadline to deliver the so-called "big beautiful" bill to the president's desk by July 4.
It's unclear what concessions, if any, Republican leadership offered the few GOP holdouts, who had threatened to stall the bill. They, along with their colleagues across the aisle, expressed consternation over the planned cuts to Medicaid as well as an estimated multitrillion dollar expansion of the national deficit.
The bill represents a massive shift of U.S. government spending priorities, eschewing clean energy spending and social safety net programs in favor of tax cuts, national defense and immigration enforcement.
As for what it all might mean for your taxes, your bill is likely to go down next year. The bill permanently extends the tax cuts introduced in the 2017 Tax Cuts and Jobs Act, while also introducing a new slate of breaks for filers.
"It's a continuation of tax policy in place right now, plus additional tax cuts on top of that," says Erica York, vice president of federal tax policy at the Tax Foundation. "On net, most taxpayers will see a tax cut, and on average, all income groups would see a tax cut."
What to expect on your taxes in 2026
The 2017 bill brought about sweeping, albeit temporary, changes to the tax code. Provisions which nearly doubled the standard deduction, upped the monetary thresholds for tax brackets, lowered the top tax rate and bumped up the child tax credit were set to expire at the end of 2025.
With those changes now permanent, Americans are getting continuity: the same tax rates, the same brackets and a standard deduction that's high enough to keep taxes simple for the vast majority of Americans; just 9% of taxpayers itemized in 2022, compared with 31% in 2017, according to data released by Congress. The bill calls for an increase in the standard deduction beginning after tax year 2025.
Filers will see some new or increased tax breaks as well.
The bill raises the nonrefundable Child Tax Credit to $2,200 starting in 2025, for instance. It also makes good on Trump's campaign promise to do away with taxes on tipped income, though the legislation caps the deduction at $25,000 a year, and the provision expires at the end of 2028.
Regardless of what the bill looks like in its final form, it's worth keeping track of exactly how it affects what you owe come tax time, says York.
To figure out what kind of tax break you got, focus on what you pay next year versus what you paid this year, she says — not the difference in any refund you might receive.
"Your refund doesn't really reflect how much you actually pay. It just reflects whether your withholding matched up with what your tax liability was supposed to be," she says. "Whether or not you get a refund [is] not related to what Congress is doing with tax law."
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