The One Big Beautiful Bill Act (OBBBA), signed into law this July, brings sweeping changes to the tax code starting in 2026. From expanding healthcare and education savings to introducing new small business incentives, the bill includes updates that could make a meaningful difference for your family’s financial future.
What’s New for Parents Saving for Education?
The bill expands how families can use 529 plans. In addition to tuition and K–12 education, 529 funds can now cover tutoring, textbooks and test preparation, online learning and homeschool materials, special education expenses such as speech therapy, occupational therapy, and adaptive learning software.
There’s also a new savings tool: Trump Accounts, which allow parents to contribute up to $5,000 per year per child. Children born between 2025 and 2028 will receive $1,000 in federal seed money. These accounts grow tax-free and can be used later for education, a first home, or even retirement.
The Child Tax Credit is also increasing—from $2,000 to $2,200 per qualifying child under age 17, and it will now adjust annually for inflation.
Saving for Healthcare and Medical Expenses
Health Savings Accounts (HSAs) are getting a major upgrade starting in 2026. Contribution limits will rise to $8,600 for individuals and $17,100 for families (previously $4,300 and $8,550) for households earning under $75,000 (single) or $150,000 (married filing jointly). New qualified HSA expenses will include gym memberships, on-site clinic services, and direct primary care arrangements (with annual caps).
I’m Nearing Retirement—How Does This Bill Help Me?
The bill introduces a new $6,000 tax deduction for seniors age 65 and older with income below $75,000 (single) or $150,000 (married filing jointly). This deduction is available in addition to the standard deduction and age-based add-ons, providing meaningful tax relief for retirees on a moderate income.
I’m Self-Employed—What Tax Breaks Can I Use?
If you own a small business or earn freelance income, two major changes may benefit you: 1) The 20% Qualified Business Income (QBI) deduction is now permanent, with expanded income phase-in thresholds of $75,000 (single) and $150,000 (married filing jointly). And 2) 100% bonus depreciation is back—allowing you to deduct the full cost of new business equipment and technology purchases in the year they’re made.
I work for a Startup/Pre-IPO Company or invest in one: Expanded QSBS Tax Benefits
The One Big Beautiful Bill Act (OBBBA) significantly expands the tax benefits and eligibility for Qualified Small Business Stock (QSBS), applying to stock issued after the law’s enactment.
Under the new rules, the gross-asset limit for companies eligible to issue QSBS increases to $75 million, and the capital gain exclusion rises to $15 million. The law also introduces a tiered system for capital gain exclusions based on how long you hold the stock:
- 100% exclusion for shares held at least 5 years
- 75% exclusion for shares held 4 years
- 50% exclusion for shares held 3 years
Why This Matters for Employees
These changes go beyond benefiting founders and venture capital firms—they may also provide meaningful tax advantages to employees.
If you work at a startup or later-stage private company and receive equity in the form of restricted stock, RSUs, or stock options, your shares may now qualify for QSBS treatment. Eligibility depends on the company’s gross assets at the time of vesting (or option exercise) and how long you hold the shares before selling.
The higher gross-asset cap means more late-stage startups could qualify, and with the exclusion window starting at just three years, more employees may benefit from significant tax savings—whether selling through a tender offer, M&A event, or IPO.
How Can I Give Back and Still Save on Taxes?
The bill introduces a charitable deduction for non-itemizers. Beginning in 2026, you can deduct up to $1,000 (single) or $2,000 (married filing jointly) in qualified charitable contributions—even if you take the standard deduction.
Additionally, starting in 2026, a new rule under the OBBBA may impact your charitable giving strategy—especially if you donate appreciated stock.
Taxpayers who itemize deductions on Schedule A will face a 0.5% AGI floor on charitable contributions. In other words, only donations that exceed 0.5% of your Adjusted Gross Income will be deductible. This makes the first 0.5% of income donated to charity non-deductible.
To maximize tax benefits, you may want to consider “bunching” donations in certain years to clear the threshold. Also beginning in 2026, taxpayers in the top 37% income-tax bracket will see their overall itemized deduction benefit capped at 35%, including for charitable contributions.
Planning Ideas to Prepare for 2026
Revisit Your 529 Plan Strategy
If you already have a 529 plan, consider increasing your contributions or expanding its use. The new rules allow funds to cover a broader range of education-related expenses—including tutoring, therapy, and homeschool support.
Open a Trump Account Early
If you're expecting a child—or have young children born between 2025 and 2028—look into opening a Trump Account once available. These accounts come with a $1,000 federal seed deposit and long-term tax-free growth potential.
Save Medical Receipts in 2025
Starting in 2026, HSA funds can be used to reimburse expenses like gym memberships and direct primary care. Hold onto 2025 receipts so you’re ready to take advantage when the rules change.
Track Charitable Giving—Even if You Don’t Itemize
You’ll be able to deduct up to $1,000 (or $2,000 for couples) in charitable donations without itemizing starting in 2026. Consider setting up recurring donations or organizing your giving now to simplify next year’s tax filing.
Proactive planning today can help your family take full advantage of tomorrow’s opportunities.
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