Excellent news for millions of Americans! There’s a new tax bill—or Trump’s “One Big Beautiful” Act—that would keep more money in your pocket as early as 2026. The bill was signed into law on July 4th and will reduce taxes for all but one of almost every tax bracket nationwide. So, how much will you save, and what does it all mean to you? Let’s simplify it for you.
What is the “One Big Beautiful” act
This new legislation extends the tax cuts of President Trump’s 2017 Tax Cuts and Jobs Act, which were set to expire in 2025. But now, thanks to this new law:
The tax cuts are extended past 2025.
Additional tax breaks have been added to benefit workers, families, and even entrepreneurs.
How much will you save
The Tax Policy Center report says:
- The average family will save about $2,900 in 2026.
- Your own savings, however, will differ depending on your income and situation.
Here’s how much you’ll save depending on income levels:
1. Low-income families (with an income of up to $34,600 per year)
- Will be able to save about $150 next year.
- That is about 0.8% of their entire income.
2. Middle-income families (with incomes between $34,600 and $217,000)
Will save $800 to $3,500, depending on income and size of family.
3. Higher-income families (who earn $217,101 or more)
Will save an average amount of about $12,540.
That’s 2.5% of their entire income.
So, the more you’re paid, the bigger the savings, especially if you’re in the top 20% of earners.
New tax breaks
There are also new and exciting benefits in the new law not covered in the initial 2017 plan. Some of the perks are big and are:
✅ No overtime pay taxes
When you work overtime, your overtime pay won’t be taxed.
This is great for those who are working overtime shifts or overtime hours.
✅ No taxes on tips
If you are working in a restaurant, salon, or any profession where you receive tips, you will no longer need to pay taxes on that amount.
This will come as a big relief to waiters, bartenders, and other service staff.
✅ Deduction for state and local tax increased
Earlier: You could deduct only $10,000 of state and local taxes.
Currently: You can exclude $40,000, which will be a boon to taxpayers in states that are highly taxed, such as New York and California.
Who benefits most
Everybody is getting some savings, but those with higher incomes are receiving the largest tax cuts. $6 out of every $10 actually going to persons with incomes above $217,000 a year.
A new poll reported:
- More than 60% of Americans believe the new law benefits primarily wealthy individuals.
- Others are also concerned that it will harm low-income families, particularly in light of the fact that the law contains cuts to programs like Medicaid and food stamps.
Your tax cut could be even bigger
Your total savings in 2026 will also depend on:
- Number of children you have (the more children, the more Child Tax Credit).
- Whether or not you have overtime pay or tips.
- Whether you can claim special deductions or credits.
Why this matters
Regardless of how much income you earn, high or low, this new law can reduce your tax bill next year. But the more you earn, the greater the savings.
This could mean:
- More to save
- More cash to spend on bills, food, or vacations
- Ability to pay off debt sooner or invest
Trump’s “One Big Beautiful” Act won’t equally impact all of us, but nearly all Americans will be affected somehow. Since 2026 is already here, a smart plan is to understand how these changes affect your taxes, manage your money, and maybe even get a little stoked that extra money is coming your way.
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So whether you’re saving $150 or over $12,000, a tax cut is a tax cut — and that’s something to smile about.
