Now that the BBB has officially been signed into law, what does it mean for you?

How much will you save in taxes?

Here’s a quick summary:

Nearly 85% of households will receive a net tax cut starting in 2026.

The 2017 tax cuts are made permanent, preventing automatic increases that were scheduled for 2026.

Tipped workers can now deduct up to $25,000 in reported tips from taxable income through 2028.

ADVERTISEMENT

Overtime pay deductions are expanded—up to $12,500 per person or $25,000 per couple.

The cap on State and Local Tax (SALT) deductions is temporarily raised to $40,000.

The Child Tax Credit increases to $2,500 through 2028, then adjusts to $2,200 thereafter.

Seniors aged 65 and older can claim a higher deduction of up to $6,000.

“Trump Accounts” allow parents to save up to $5,000 per year per child in tax-advantaged accounts.

Business owners benefit from expanded deductions for research, equipment, and payroll taxes.

New payroll tax credits linked to tipped income reduce tax burdens for service industry employers and workers.

Here’s a deeper breakdown from Yahoo Finance:

Here’s how the bill would impact your taxes.

ADVERTISEMENT

High-income earners (>$217,000)

For taxes filed in 2026, households making between $217,000 and $318,000 would see their aftertax income rise 2.6 percent, a tax break of about $5,400. For Americans making $318,000 to $460,000 — in the 90th to 95th percentile — that cut would be about $8,900, or a 3.1 percent increase to their aftertax income.

Those making between $460,000 and $1.1 million would receive the biggest break: a $21,000 change, increasing their aftertax income by 4.4 percent.

The top 1 percent and the top 0.1 percent — households making more than $1.1 million or $5 million — would see their aftertax incomes increase 3.5 percent and 3.2 percent, respectively.

Middle-income earners ($50,000-$200,000)

The tax breaks for the rest of Americans are far less substantial, according to the center’s estimates.

Households making between $100,000 and $200,000 a year would see their aftertax income increase by 2.5 percent, about a $3,000 tax break. For those making between $75,000 and $100,000, the tax cut as a percentage of income is similar — at about $1,700 or 2.3 percent.

Americans earning between $50,000 and $75,000 will have a $1,000 tax break.

Low-income earners (
Source link