In this episode of OBBBA Bite-Sized Insights, Joe Elsasser, CFP®, unpacks two lesser-known but impactful changes from the One Big Beautiful Bill Act: permanent tax brackets (with a few twists) and a higher standard deduction for all filing statuses. See how these updates create more room in lower brackets for tax-efficient strategies like Roth conversions and withdrawals—especially for middle-income clients.
Key Takeaways:
Permanent Tax Brackets: The 10%, 12%, 22%, 24%, 32%, and 35% rates are now “permanent” (until Congress changes them), eliminating the 2026 sunset.
Higher Standard Deduction: About a 5% increase for all filing statuses—$31,500 for married couples, $15,750 for singles—reducing taxable income for most filers.
Planning Opportunities: More room in the lower brackets in 2026 thanks to “double inflation” on the 10% and 12% brackets, creating opportunities for strategic conversions or withdrawals.
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