Here’s your potential tax cut in 2026 from the One Big Beautiful Bill Act

The recent tax bill signed into law by President Trump on July 4 is expected to bring savings to millions of taxpayers next year. According to a recent analysis from the Tax Policy Center, every income group is projected to see some level of savings, with an average of about $2,900 per household in 2026.

The new law extends the tax cuts from President Trump’s 2017 Tax Cuts and Jobs Act, which were set to expire at the end of the year. In addition to extending existing provisions, the legislation also introduces new tax breaks, such as the elimination of taxes on overtime and tips, as well as increasing the state and local taxes deduction from $10,000 to $40,000.

While the tax breaks are beneficial across the board, higher-income Americans are expected to see a larger relative boost compared to lower-income households. The analysis found that about $6 out of every $10 in tax breaks will go to the top 20% of households, those earning incomes of $217,000 or more.

For lower-income households in the bottom quintile, earning up to $34,600 per year, the average tax savings are estimated to be around $150, or 0.8% of their income. In contrast, those in the top quintile, earning $217,101 or more, are projected to save an average of $12,540 next year, or 2.5% of their incomes.

It’s important to note that individual tax savings will vary depending on factors such as the number of children in the household, which can impact eligibility for the Child Tax Credit, and whether the taxpayer can take advantage of new tax breaks like the elimination of taxes on tipped income.

Overall, the new tax bill is expected to provide relief to taxpayers across income levels, with higher-income households seeing a larger share of the benefits. As the law takes effect next year, many Americans can look forward to a lower tax bill and potentially more money in their pockets.