Standard Deduction 2026: New Amounts and What Changed Under OBBBA

The standard deduction for 2026 is higher than ever, thanks to the One Big Beautiful Bill Act (OBBBA). The law permanently extended the nearly doubled standard deduction that was introduced by the 2017 Tax Cuts and Jobs Act – which was originally scheduled to revert to much lower levels after 2025.

2026 Standard Deduction Amounts

Source: IRS IR-2025-102

Additional standard deduction for age 65+ or blind: approximately $1,600 (single/HoH) or $1,300 (married) per qualifying condition.

What the OBBBA Changed

1. Made the Doubled Standard Deduction Permanent

The TCJA roughly doubled the standard deduction in 2018 – from ~$6,350 to ~$12,000 for single filers. This was scheduled to expire after 2025, reverting to pre-TCJA levels (roughly $8,000-9,000 for single filers after inflation). The OBBBA made the higher levels permanent.

2. Additional OBBBA Provisions

The OBBBA also introduced two additional provisions related to the standard deduction:

• Charitable deduction for non-itemizers: Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 ($2,000 for married filing jointly) in cash contributions to qualifying 501(c)(3) organizations. This is a separate below-the-line deduction, not an increase to the standard deduction itself. Available through 2028.
• Senior bonus deduction: Taxpayers aged 65 and older receive an additional $6,000 standard deduction for tax years 2025 through 2028.

3. Permanently Repealed Personal Exemptions

Under pre-TCJA law, taxpayers could claim a personal exemption (~$5,000 per person) in addition to the standard deduction. The TCJA suspended these exemptions through 2025 – they were scheduled to return in 2026. The OBBBA permanently eliminated them.

Net effect: For single filers and married couples with one child or no children, the higher standard deduction more than compensates for the lost personal exemption. For larger families, the expanded Child Tax Credit is designed to make up the difference.

Standard Deduction vs. Itemizing in 2026

You should itemize if your total itemized deductions exceed your standard deduction. Common itemized deductions include:

• State and local taxes (SALT): Now up to $40,000 (OBBBA increased from $10,000 for AGI under $500,000)
• Mortgage interest: On up to $750,000 of acquisition debt
• Charitable contributions
• Medical expenses: Exceeding 7.5% of AGI
• Casualty and theft losses (from federally declared disasters only)

When Itemizing Likely Makes Sense

The raised SALT cap ($40,000 vs. $10,000) pushes more people into itemizing territory – especially homeowners in high-tax states who also pay significant state income taxes.

For Self-Employed: Standard Deduction + Business Deductions

This is the most commonly misunderstood point for freelancers and self-employed individuals: the standard deduction and business deductions are not either/or. You can – and should – claim both.

• Business deductions go on Schedule C and reduce your self-employment income (and self-employment tax)
• Standard deduction (or itemized deductions) reduces your personal taxable income on Form 1040
• QBI deduction is a third, separate deduction calculated from your net business income

Example: A freelancer with $100,000 gross income, $20,000 in business expenses, and the standard deduction:

1. Schedule C net income: $80,000 (after $20,000 business deductions)
2. QBI deduction (tax year 2026): $18,400 (23% of $80,000)
3. Standard deduction: $16,100
4. Taxable income: $80,000 – $18,400 – $16,100 = $44,050

Business deductions, QBI deduction, and standard deduction all stack – tracking business expenses is essential regardless of whether you take the standard deduction.

Frequently Asked Questions

Is the standard deduction permanent now?

Yes. The OBBBA permanently extended the higher standard deduction amounts. The OBBBA provision ($1,000/$2,000) expires after 2028, but the base amounts continue with annual inflation adjustments.

Will personal exemptions come back?

No. The OBBBA permanently repealed personal exemptions. They will not return in 2026 or any future year under current law.

Does the standard deduction affect self-employment tax?

No. Self-employment tax is calculated on your net self-employment income (Schedule C profit), not your taxable income after the standard deduction. Business deductions reduce SE tax; the standard deduction does not.

Should freelancers take the standard deduction or itemize?

It depends on your personal deductions – not your business expenses. Business expenses on Schedule C are separate from the standard deduction/itemizing decision. Most freelancers who rent (no mortgage interest deduction) and live in low-tax states will take the standard deduction. Homeowners in high-tax states may benefit from itemizing, especially with the SALT cap at $40,000.

Bottom Line

The 2026 standard deduction at $16,100 (single) / $32,200 (MFJ) – plus the temporary $1,000/$2,000 bonus – provides significant tax relief for all filers. For self-employed individuals, remember that this works alongside your business deductions and the 23% QBI deduction (for tax year 2026) – all three stack to minimize your tax bill.

This article is for informational purposes only and does not constitute tax, legal, or accounting advice. Consult a qualified tax professional for guidance specific to your situation.