2026 Tax Season is Here: The OBBBA Impact Report
The 2026 filing season (covering your 2025 income) officially marks a new era in tax law. The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, has reshaped everything from your standard deduction to how you send money abroad.
At KKCA, we’ve summarized the most impactful changes to ensure you are ready for your 2026 consultation.
1. 2026 Inflation Wins: Bigger Exclusions
The IRS has significantly raised the bar for what you can earn before paying U.S. tax. These 2025 numbers (for filing in 2026) are the highest we have seen in years.
| Tax Item | 2025 Amount (Filed in 2026) | 2026 Planning (Filed in 2027) |
|---|---|---|
| Foreign Earned Income (FEIE) | $130,000 | $132,900 |
| Standard Deduction (Joint) | $31,500 | $32,200 |
| Standard Deduction (Single) | $15,750 | $16,100 |
| Exit Tax Exclusion | $890,000 | $910,000 |
2. The New 1% “Remittance Tax”
Starting January 1, 2026, a new 1% federal excise tax applies to certain international money transfers.
- The Scope: This primarily targets remittances sent via cash, money orders, or similar instruments from the U.S. to foreign recipients.
- The Reporting: Providers must now file quarterly returns with the IRS to account for these fees.
- KKCA Tip: If you frequently send funds to family in India or the UK, we can help you review your transfer methods to minimize the impact of this new 1% fee.
3. Form 1099 Changes: The $2,000 Threshold
The OBBBA has simplified life for many small business owners by raising the reporting threshold for Forms 1099-NEC and 1099-MISC.
- New Limit: You no longer need to issue a 1099 for payments under $2,000 (up from the previous $600).
- Self-Employed: This applies to any non-employee compensation paid during the 2025 calendar year.
4. The 2026 Deadlines: Save These Dates
Mark your calendars—these are the key dates for the upcoming season:
- January 15, 2026: Final Q4 2025 Estimated Tax Payment due.
- March 16, 2026: Deadline for Partnerships, S-Corps, and Multi-Member LLCs (Form 1065/1120-S).
- April 15, 2026: Tax Day. Individual 1040s, C-Corps, and FBARs are due.
- June 15, 2026: Automatic extension deadline for Expats living abroad.
- October 15, 2026: Final deadline for extended 1040s and FBARs.
5. New Deductions for 2026 (OBBBA Highlights)
The OBBBA didn’t just change numbers; it added new ways to save:
- No Tax on Tips & Overtime: New provisions are rolling out to reduce the tax burden on specific service-sector earnings.
- Charitable Cash Deduction: For those who don’t itemize, a new $1,000 ($2,000 for couples) deduction for cash donations is now permanent.
- Mortgage Insurance: The deduction for mortgage insurance premiums has been permanently reinstated.
Ready for 2026?
With AI-driven data matching now live at the IRS, the margin for error on international returns has reached zero. At KKCA, we use proprietary modeling to ensure your 1040, FBAR, and new OBBBA schedules are perfectly aligned.
Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.
Disclaimer
This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.