TCJA Made Permanent: Your 2026 Tax Brackets Explained

Congress passed the One Big Beautiful Bill Act in July 2025. The legislation made most of the Tax Cuts and Jobs Act’s individual provisions permanent: the lower brackets, the larger standard deduction, the expanded estate tax exemption, and more. For most households, 2026 tax rates are the same as 2025.

That’s a meaningfully different tax environment than what looked likely a year ago. This article covers what changed, what’s new, and what it means for your retirement tax planning going forward.

The One Big Beautiful Bill Made the TCJA Permanent

The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, permanently extended the core individual tax provisions of the 2017 Tax Cuts and Jobs Act. The seven lower tax brackets TCJA introduced, the near-doubled standard deduction, and the expanded estate and gift tax exemption are no longer temporary. They’re the law going forward, with no built-in expiration date.

Before this legislation passed, most TCJA individual provisions were set to expire at the end of 2025, which would have reverted rates to 2017 levels and triggered tax increases for roughly 62 percent of filers, according to the Tax Foundation. That reversion didn’t happen. For retirees drawing down savings, collecting Social Security, and managing taxable income across multiple account types, the confirmed rate environment changes the planning calculus in ways worth understanding.

What’s Permanent and What’s Temporary Under the One Big Beautiful Bill

Most of what you’re used to under TCJA is now permanent. Here’s what matters for 2026 and beyond.

Now permanent:

• The current income tax bracket structure: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with thresholds indexed for inflation
• Higher standard deduction: For 2026 taxes (filed in 2027): $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household
• Higher estate and gift tax exemption, rising to $15 million per individual in 2026 and indexed for inflation going forward
• $750,000 cap on mortgage interest deduction for new borrowing
• Elimination of personal exemptions
• $1,000 above-the-line charitable contribution deduction for single filers ($2,000 for married couples), available even if you don’t itemize, starting in tax year 2026. (Note that contributions to donor-advised fund sponsors don’t qualify for this deduction.)

Temporary through 2028:

• Federal income tax exemption on tip income for eligible workers
• Federal income tax exemption on overtime pay for certain workers
• Bonus deduction for individuals age 65 and older (see below)
• Car loan interest deduction

Temporary through 2030:

• SALT deduction cap raised from $10,000 to $40,000 (rising to $40,400 in 2026), then reverting to $10,000 in 2030. The higher cap phases out for filers with MAGI above $500,000.

Estate Tax Exemption, Senior Bonus Deduction, and Charitable Giving: Key Changes for Retirees

Not every change in the One Big Beautiful Bill carries the same weight for someone in or near retirement. These three are worth understanding in detail.

The estate tax exemption increase 

This is the most significant change for anyone with estate planning concerns. The exemption rises to $15 million per person ($30 million for married couples) in 2026 and is indexed for inflation going forward. The urgency that pushed many families to accelerate gifting strategies before the end of 2025 no longer applies, though that doesn’t mean estate planning can be set aside entirely. The right question now is whether your estate plan reflects the permanent higher exemption rather than the old temporary one.

The 65-and-older bonus deduction 

This is a new above-the-line deduction of $6,000 per eligible individual (age 65 or older), available for tax years 2025 through 2028. It’s in addition to the existing additional standard deduction that seniors already receive, not a replacement for it. The deduction phases out for filers with modified adjusted gross income above $75,000 (single) or $150,000 (married filing jointly). For retirees within those thresholds, it meaningfully reduces taxable income and is worth confirming in your plan assumptions.

The charitable deduction for non-itemizers 

This is permanent starting in tax year 2026. If the standard deduction exceeds your itemized deductions, which is true for most retirees under the extended TCJA, you can now deduct up to $1,000 in qualifying charitable contributions ($2,000 if married filing jointly) regardless. One important limitation: contributions to donor-advised fund sponsors do not qualify. If your charitable giving strategy runs through a DAF, this deduction doesn’t apply to those contributions. Direct donations to qualifying organizations do qualify.

Roth Conversion Strategy Under a Permanently Extended TCJA

Roth conversions made sense when rates were expected to jump in 2026. They still make sense; the reasoning has changed.

Under a permanently extended TCJA, the case for conversions is more structural: convert deliberately while you’re in a lower bracket, before RMDs push your taxable income higher. For retirees between age 59½ and their RMD start date, that planning window is the same as it was before. In some ways it’s more reliable, because the rates you’d convert at are confirmed rather than contingent on legislation.

Three things worth modeling:

• Converting pre-tax savings to Roth reduces future RMD exposure, which matters most if you carry a large traditional IRA or 401(k) balance
• Tax-free Roth growth and withdrawal eliminates the risk of future rate changes, which could still come from future Congresses even with TCJA now permanent
• Multi-year conversion strategies at current rates can significantly reduce lifetime tax liability when the full picture is modeled, including estate value at longevity

The Boldin Planner’s Roth Conversion Explorer runs exactly this analysis. It models conversion scenarios year by year, projects long-term net worth and estate value impact, and lets you compare strategies side by side at different income levels and conversion amounts. If you have a meaningful pre-tax balance and haven’t revisited your Roth strategy lately, running the numbers is worthwhile.

Retirement Tax Planning: Brackets, RMDs, and State Taxes

The One Big Beautiful Bill stabilized the rate environment. It didn’t simplify retirement tax planning. Here’s where to focus.

Bracket management is still the primary lever

With rates confirmed rather than uncertain, the goal is keeping taxable income in the lowest viable bracket year by year. That means coordinating Social Security timing, IRA withdrawals, capital gains realizations, and Roth conversions rather than defaulting to whatever feels easiest in a given year. It also means staying aware of IRMAA thresholds.

RMDs haven’t changed, but the planning context has

RMDs begin at age 73 for those born before 1960, and at age 75 for those born in 1960 or later. They’re taxed as ordinary income, so a large traditional account balance means future forced income at whatever bracket you’re in when distributions begin. Managing that exposure through conversions, qualified charitable distributions (QCDs), or deliberate withdrawal sequencing is still one of the highest-value things a retiree can do.

State taxes remain their own variable

The TCJA extension doesn’t touch state income taxes. The raised SALT cap provides partial relief for retirees in high-tax states through 2030. But the cap reverts to $10,000 after that, and state-level planning continues to matter, particularly if a move is under consideration.

Future legislative risk is real

Permanent has a specific legal meaning: no built-in expiration date. It doesn’t mean the law can’t change. Future Congresses retain the ability to revise the tax code. Building flexibility into your plan across pre-tax, Roth, and taxable accounts remains a sensible hedge regardless of today’s rate structure.

The Boldin Planner models your projected taxes year by year under the current rate environment.

Use the Boldin Planner to Act on These Tax Changes

Tax law changing in your favor is genuinely useful. If you’re weighing Roth conversions, open the Roth Conversion Explorer in the Boldin Planner and run scenarios against your current bracket. The goal is converting enough to reduce future RMD exposure without pushing into the next bracket. Multi-year sequencing is worth mapping out deliberately.

If you’re 65 or older with MAGI under $75,000 (single) or $150,000 (joint), make sure the 65-and-older bonus deduction is reflected in your plan assumptions for 2025 through 2028. It’s $6,000 per eligible individual and may meaningfully shift how much conversion room you have in those years.

If you’re a PlannerPlus subscriber, use scenario comparisons to stress-test your withdrawal sequence — traditional IRA first, Roth first, mixed — across your RMD years. That’s where the planning leverage tends to be highest. The differences between strategies aren’t always obvious until you see them side by side.

You’ve spent years building what you have. A little time in the Planner can make a real difference in how far it goes.

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One Big Beautiful Bill FAQ: Retirement Taxes, Roth Conversions, and RMDs