OBBBA Tax Calculator 2026

Start by entering your annual gross income — your total earnings from all sources before any taxes are taken out. This should match the amount shown on your W-2 Box 1, or the combined total across all W-2s and 1099s if you have multiple income sources.

Select your filing status from the dropdown. This determines your tax brackets and standard deduction. Single applies to unmarried individuals, Married Filing Jointly is typically best for married couples, Head of Household applies to unmarried individuals supporting a dependent, and Married Filing Separately is for married individuals who choose to file independent returns.

Enter the number of children under 17 to calculate the Child Tax Credit. Under OBBBA, each qualifying child generates a $2,500 credit (up from $2,000). The calculator automatically shows the $500 per-child increase as part of your savings.

If you work in a tipped occupation, enter your annual tip income. Under OBBBA, up to $25,000 in tips is exempt from federal income tax for workers earning less than $160,000. If you earn overtime pay as an hourly worker, enter your annual overtime income — up to $12,500 is deductible under the new law.

Enter your total state and local taxes (SALT) paid. Under old law, this deduction was capped at $10,000. The OBBBA raises the cap to $40,400, which is a major benefit for residents of high-tax states. If you are 65 or older, toggle the senior switch to receive the $4,000 additional standard deduction. Finally, if you have an auto loan on a US-assembled vehicle, enter the annual interest to claim the new deduction of up to $10,000.

The OBBBA Tax Calculator helps you understand how the One Big Beautiful Bill Act — the landmark tax reform law signed on July 4, 2025 — affects your personal tax situation. The law, officially known as the One Big Beautiful Bill Act, represents the most significant tax overhaul since the 2017 Tax Cuts and Jobs Act. It makes the 2017 individual tax cuts permanent and introduces several new provisions designed to reduce the tax burden on working Americans, families with children, seniors, and residents of high-tax states.

The OBBBA includes six major provisions that this calculator models: no federal income tax on tips (up to $25,000 for incomes under $160,000), an overtime pay deduction (up to $12,500), an increased Child Tax Credit ($2,500 per child, up from $2,000), a higher SALT deduction cap ($40,400, up from $10,000), a senior bonus deduction ($4,000 for taxpayers 65+), and a new auto loan interest deduction (up to $10,000 on US-assembled vehicles). Together, these provisions can reduce your federal tax bill by hundreds to thousands of dollars compared to the prior law.

According to the Tax Foundation, the OBBBA's individual tax provisions will reduce federal revenue by approximately $4.5 trillion over the next decade. The typical American household is expected to see meaningful tax relief, with the largest percentage savings going to lower and middle-income families who benefit from the tip exemption, overtime deduction, and increased child credit. High-income taxpayers in states with heavy state taxes also benefit substantially from the quadrupled SALT cap.

This calculator compares your estimated tax under the old law (pre-OBBBA) against the new law, showing your total savings and breaking down exactly which provisions benefit you the most. Enter your income, filing status, and applicable deductions to see your personalized savings estimate.

The OBBBA Tax Calculator compares two parallel tax computations — one under the previous law and one under the new OBBBA provisions — and shows the difference as your total savings.

Old Law Calculation:

Old Taxable Income = Gross Income − max(Standard Deduction, min(SALT, $10,000))

Old Tax = Progressive Bracket Tax(Old Taxable Income) − ($2,000 × Children)

OBBBA (New Law) Calculation:

New Deductions = max(Standard Deduction, min(SALT, $40,400) + min(Auto Interest, $10,000)) + Senior Bonus + Tip Exemption + Overtime Deduction

New Taxable Income = Gross Income − New Deductions

New Tax = Progressive Bracket Tax(New Taxable Income) − ($2,500 × Children)

Total Savings:

Savings = Old Tax − New Tax

The following table defines the key OBBBA provisions and their limits:

Example 1 — Restaurant Server with Tips: A single filer earns $45,000 gross income, of which $20,000 is tip income. Under old law, they take the $15,000 standard deduction and pay tax on $30,000 taxable income, resulting in approximately $3,378 in federal tax. Under OBBBA, the $20,000 in tips is fully exempt (under the $25,000 cap and $160K income limit), plus the standard deduction rises to $16,100. Their new taxable income is only $8,900, resulting in just $890 in tax. Total savings: $2,488. The no-tax-on-tips provision alone saves this worker over $2,000.

Example 2 — Family with Children in a High-Tax State: A married couple filing jointly earns $150,000 with two children under 17. They pay $25,000 in state and local taxes. Under old law, the SALT cap limits their deduction to $10,000, so they take the $30,000 standard deduction. Their tax after the $4,000 Child Tax Credit is approximately $14,690. Under OBBBA, they can deduct the full $25,000 in SALT (under the new $40,400 cap), their standard deduction rises to $32,200, and each child generates a $2,500 credit. Their new tax is approximately $11,530. Total savings: $3,160, with the SALT cap increase and child credit boost providing the biggest benefits.

Example 3 — Senior Retiree: A single filer age 68 earns $55,000 from retirement income. Under old law, the standard deduction is $15,000, resulting in $40,000 taxable income and approximately $4,568 in tax. Under OBBBA, the standard deduction is $16,100 plus the $4,000 senior bonus, totaling $20,100. Taxable income drops to $34,900, resulting in approximately $3,939 in tax. Total savings: $629. The senior deduction bonus provides meaningful relief on a fixed income.

Example 4 — Factory Worker with Overtime: A single filer earns $65,000, of which $12,000 is overtime pay. Under old law, the full $65,000 minus the $15,000 standard deduction yields $50,000 taxable income and approximately $6,691 in tax. Under OBBBA, the $12,000 in overtime is deductible plus the standard deduction rises to $16,100. Taxable income becomes $36,900, and tax drops to approximately $4,179. Total savings: $2,512. The overtime exemption is the primary driver of savings for hourly workers.