The One Big Beautiful Bill Act: What EAs Need to Know About 2026 Tax Changes

2026-07-09

Last reviewed: July 9, 2026. This article reflects current IRS rules and EA exam requirements as of this date.

The One Big Beautiful Bill Act (OBBBA) is the most significant tax legislation since the 2017 TCJA. If you're studying for the Enrolled Agent exam, these changes will be testable. Here's what matters.

Universal Charitable Deduction

Previously, only taxpayers who itemized could deduct charitable contributions. The OBBBA changes that starting in 2026: everyone gets a charitable deduction, whether they itemize or take the standard deduction. This is a major shift. Millions more taxpayers will claim charitable deductions on their returns.

For EA candidates: know the new rules. The deduction is available to all filers regardless of whether they itemize. There's likely a cap or phaseout. Drill into the specifics from the IRS guidance as it's finalized.

Itemized Deduction Cap for High-Income Taxpayers

Taxpayers in the 37% bracket face a new overall cap on itemized deductions. The tax benefit of all itemized deductions is limited. This replaces the old Pease limitation (which was suspended under TCJA) with a new mechanism.

Key numbers to know for the exam:

Applies to the 37% bracket only (top earners)
Caps the tax benefit of itemized deductions, not the deductions themselves
Different from the standard deduction. this affects those who itemize

TCJA Provisions That Remain

The TCJA was originally set to expire at the end of 2025. The OBBBA extends or makes permanent several key provisions:

Larger standard deduction. the nearly doubled amounts from TCJA remain
Lower individual rates. the 10%, 12%, 22%, 24%, 32%, 35%, and 37% brackets continue
$10,000 SALT cap. state and local tax deduction remains capped at $10,000

If you're studying for the SEE exam, here's your priority list:

Memorize the new charitable deduction rules. Everyone qualifies now. This will be tested.
Know the 37% bracket itemized deduction cap. It's a new addition to the tax code and exam writers love testing new material.
Don't forget the TCJA provisions that survived. The standard deduction amounts, tax brackets, and SALT cap are still testable. They just got extended rather than expiring.

Every major tax law change creates work for tax professionals. Millions of taxpayers will need to understand how the OBBBA affects their returns. Charitable deduction planning becomes relevant for everyone, not just itemizers. The 37% bracket cap creates new planning considerations for high-income clients.

This is exactly why the EA credential exists. To have professionals who can navigate complex, changing tax law and represent taxpayers before the IRS.

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