Home / OBBB – Tax Deductions for Individuals in 2026 

OBBB – Tax Deductions for Individuals in 2026 

August 19, 2025 | Weekly Commentary

On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBB) Act, bringing several tax changes for individuals and businesses. Last week, we explored the deductions available for the 2025 tax year.  This week, we will explore key updates for deductions that will take effect for tax years beginning in 2026. 

Charitable Donations 

  • If you don’t itemize, you can deduct up to $1,000 ($2,000 for joint filers) for cash donations to charity. 
  • If you itemize, your charitable deductions will be reduced slightly (by 0.5% of your income base), which may lower your deduction amount. 

Gambling Losses 

If you gamble, you can deduct losses (and related expenses, like travel to a casino) up to your gambling winnings. Starting in 2026, you can only deduct 90% of your losses, not the full amount. 

Educator Expenses 

Teachers can deduct classroom expenses: 

  • Up to $300 as an “above-the-line” deduction (reducing your income before other calculations) in 2025. 
  • Starting in 2026, additional expenses can be deducted if you itemize, with no 2% income limit. 

Overall Limit on Itemized Deductions 

Starting in 2026, if you’re in the highest tax bracket (37%), your total itemized deductions will be reduced. The reduction is based on either your total deductions or your taxable income, whichever is smaller, and applies after other limits. 

It’s important to keep these changes in mind as you prepare your tax projection for 2025, 2026, and beyond.  Smart planning coordinates deductions to maximize tax benefits.