CNBC.COM
President Donald Trump's "One Big Beautiful" bill, signed into law on July 4, locked in his first-term tax cuts set to expire in 2025 while also introducing a slate of new breaks.
A new calculator from the Tax Foundation shows how the changes affect 2026 tax bills — and how much more take-home pay most households can expect compared with if the earlier cuts had expired.
Here's how the nonpartisan think tank estimates the law will affect 2026 take-home pay. The brackets reflect gross household income, and the percentages show how much net pay will rise under the new law, reflecting all of its tax-rate cuts, deductions and credits.
- Up to $17,735: 2.6% increase in take-home pay
- $17,736–$38,572: 5.2% increase in take-home pay
- $38,573–$73,905: 5.7% increase in take-home pay
- $73,906–$130,661: 6.3% increase in take-home pay
- Above $130,661: 5.0% increase in take-home pay
The benefits aren't evenly distributed. The biggest percentage boost in take-home pay goes to upper-middle-income households, while the lowest earners see the smallest gains.
The gains also reflect new deductions and expanded credits: The standard deduction edges higher to $15,750 for single filers and $31,500 for married couples filing jointly, while the child tax credit rises slightly to $2,200 per child, with both now adjusting automatically 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 cap on state and local tax write-offs also increases from $10,000 to $40,000 for most households, though it scales back for top earners.
These changes are reflected in the Tax Foundation's 2026 calculator, which models the new law using its own estimates for inflation and deduction thresholds. Using the calculator, you can test different household situations by selecting the "Create a custom scenario" option under the 2026 tax calculator heading.
Here are a few sample scenarios showing how taxpayers could fare in 2026 under the new law:
- Single, $30,000 income: tax cut of $752 (take-home pay up 2.9%)
- Single, $75,000 income: tax cut of $3,378 (take-home pay up 5.6%)
- Single parent with two kids, $52,000 income: tax cut of $1,861 (take-home pay up 3.8%)
- Married couple with two kids, $85,000 income: tax cut of $2,474 (take-home pay up 3.3%)
- Married couple with three kids, $200,000 income: tax cut of $8,487 (take-home pay up 5.3%)
The tax breaks come with a cost, however. They're projected to increase federal deficits by at least $3.4 trillion over the next decade, according to the Congressional Budget Office.
On their own, these deficits would add to the national debt, which now exceeds $36 trillion — up from about $23 trillion in early 2020. That's an increase of more than 50% in five years, largely driven by pandemic relief, rising social program costs and continued government borrowing.
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