The Trump tax plan for individuals permanently extends the 2017 Tax Cuts and Jobs Act while adding new deductions for tips, overtime, and car loan interest through 2028. President Trump signed the One Big Beautiful Bill into law on July 4, 2025.
This matters because 90% of American workers will see tax changes. The law keeps rates predictable while offering temporary breaks that could save thousands.
This guide covers Trump’s tax plan brackets for individuals, new deductions, planning strategies, and common mistakes.
What Is the Trump Tax Plan for Individuals?
The Trump tax plan for individuals makes permanent many tax cuts from 2017. The law extends lower rates, higher standard deductions, and simplified filing rules indefinitely.
The plan keeps seven federal tax brackets for individuals: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These individual income tax rates adjust yearly for inflation.
Trump New Tax Plan for Individuals: Key Proposals and Continuity
Trump’s new tax plan for individual workers combines permanent provisions with temporary benefits. Some rules last forever, while others expire after 2028.
Temporary provisions run from 2025 through 2028:
- No tax on qualified tips (up to $25,000 deduction)
- No tax on overtime pay (up to $12,500 individual/$25,000 married)
- No tax on car loan interest (up to $10,000 deduction)
- An additional $6,000 deduction for seniors 65+
These temporary breaks phase out at higher incomes.
Core Goals of the Trump Individual Tax Plan
The Trump tax plan brackets for individuals aim to simplify taxes and reduce rates. Three main goals drive the plan:
- Lower taxes for working families through permanent rate reductions
- Reward work by exempting tips and overtime from taxation
- Simplify filing with higher standard deductions
About 90% of taxpayers now use the standard deduction. This saves time and reduces errors.t
How the New Plan Differs from Current Tax Law
Trump’s new tax plan for individual filers makes the 2017 tax cuts permanent while adding new benefits. Major differences include:
- Deduction for qualified tips income
- Deduction for qualified overtime earnings
- Deduction for interest on certain vehicle loans
- Expanded adoption credit thresholds
- Additional senior deduction eligibility
These adjustments create a measurable federal tax reform impact by changing taxable income directly rather than altering rate percentages.
ExampleA restaurant worker reporting $8,000 in tips annually may deduct qualified amounts under updated rules. |
This shows how policy adjustments affect real households without modifying bracket percentages. The standard deduction changes remain permanent.
Trump Tax Plan Brackets for Individuals Explained
The Trump tax plan brackets for individuals use a seven-level progressive structure where tax rates increase as income moves into higher thresholds.
These federal tax brackets for individuals ensure you pay 10% on your first $12,400 (if single), then 12% on income from $12,401 to $50,400, and so on.
Current rate structure overview
| Rate | Example Single Income Threshold |
| 10% | Income up to base threshold |
| 12% | Income above the lower band |
| 22% | Middle-range earnings band |
| 24% | Upper-middle band |
| 32% | Higher income band |
| 35% | High-income band |
| 37% | Top marginal band |
For 2026, married couples filing jointly face these thresholds:
- 10%: $0 to $24,800
- 12%: $24,801 to $100,800
- 22%: $100,801 to $211,400
- 24%: $211,401 to $403,550
- 32%: $403,551 to $512,450
- 35%: $512,451 to $768,700
- 37%: Over $768,700
These brackets adjust annually for inflation.
How the Trump Tax Plan Impacts Individual Taxpayers
The Trump tax plan for individuals affects different income groups in distinct ways. You save money compared to the pre-2017 tax law.
Impact on Middle-Income Individuals
Middle-income families see the biggest percentage savings. The doubled standard deduction alone cuts taxable income significantly. A married couple earning $80,000 pays roughly $2,000 less per year.
New temporary deductions boost savings further. Service workers deduct up to $25,000 in qualified tips. Hourly workers earning overtime might deduct up to $12,500 in premium pay. Personal income tax planning becomes simpler for middle-income individuals.
Impact on High-Income Earners
High-income individuals face mixed results. The 37% top rate on income over $640,600 for singles beats the previous 39.6% rate.
However, the $10,000 SALT deduction cap hurts those in high-tax states. Alternative Minimum Tax exemptions increased to $90,100 for singles and $140,200 for married couples in 2026.
Impact on Self-Employed Individuals
Self-employed individuals benefit from the qualified business income (QBI) deduction. You deduct up to 20% of business profits. This deduction phases out for service businesses above certain income levels.
| The no-tax-on-tips provision works differently for self-employed workers. You can’t work in a Specified Service Trade or business and claim the tip deduction. |
Deductions and Credits Under the Trump Tax Plan
The Trump tax plan for individuals includes several deductions and credit provisions shaping final liability.
Standard Deduction Changes for Individuals
The standard deduction changes represent the biggest shift. For 2026, deductions are $32,200 for married couples, $16,100 for single filers, and $24,150 for heads of household. These amounts increase yearly with inflation.
| Filing Status | Approx. Deduction Level |
| Single filer | Higher baseline threshold |
| Married filing jointly | Significantly larger combined amount |
| Head of household | Moderate increase |
Itemized Deductions and Limitations
The itemized deduction limits restrict certain write-offs. Key rules include
- SALT deduction capped at $10,000
- Mortgage interest is deductible on loans up to $750,000
- Charitable contributions remain fully deductible.
- The federal tax reform impact eliminated miscellaneous deductions subject to the 2% floor.
Read: Tax Saving Strategies and Deductions Your CPA Might Not Know About
Tax Planning Considerations Under the Trump Tax Plan
Effective planning under the Trump tax plan brackets for individuals requires attention to income timing and deduction management.
Timing Income and Deductions Strategically
Your income tax strategy should account for temporary deductions expiring after 2028. Defer income to 2025-2028 if you receive tips or overtime. Time major purchases of U.S.-assembled vehicles to claim the car loan interest deduction. Seniors age 65+ should claim the additional $6,000 deduction starting in 2025.
Coordinating Federal and State Tax Planning
Federal tax reform’s impact on state taxes varies by location. Some states conform to federal tax law, while others use different rules. The SALT deduction cap creates a double hit in high-tax states. Consider advanced tax planning strategies to manage both together.
Common Tax Planning Mistakes Individuals Should Avoid
Errors frequently occur because you rely on outdated assumptions about U.S. tax law changes.
Relying on Old Tax Rules
Tax law changed significantly in 2017 and again in 2025. The U.S. tax law changes eliminated many itemized deductions. Smart tax planning adapts to these U.S. tax law changes annually.
Waiting Too Late to Adjust Tax Strategy
December tax planning misses most opportunities. Your income tax strategy should start early to maximize tips and overtime deductions throughout the year. Time for car purchases to capture the loan interest deduction. Service workers should track tips monthly.
How Individuals Can Prepare for Changes in the Trump Tax Plan
Preparation starts with understanding which provisions affect you. Personal income tax planning requires reviewing your situation now to identify opportunities.
Working with SWAT Advisors for Proactive Planning
SWAT Advisors builds systems where the IRS pays for your wealth growth. With $100M+ in client savings, we’ve mastered the Trump tax plan for individuals.
How we help under Trump’s new tax plan for individual workers:
- Maximize temporary deductions (tips, overtime, car loans) before 2028
- Quarterly reviews adapting to Trump’s tax plan brackets for individuals
- Capture the 20% QBI deduction without phase-outs
- Get customized individual tax planning strategies that reduce liability
- Coordinate federal-state planning with timed Roth conversions
- Design planning for doctors, dentists, business owners, and families
Smart preparation keeps you ahead of the Trump tax plan brackets for individuals.
Book your consultation with SWAT Advisors today.
Beat Tax Changes with SWAT Advisors
The Trump tax plan for individuals delivers predictable, permanent tax relief while offering temporary bonuses through 2028. But those temporary deductions expire in 2028, and you will miss them entirely because you waited too long. While you’re reading this, the IRS is collecting billions from people who qualified for these breaks but never claimed them.
SWAT Advisors specializes in capturing every dollar Trump’s new tax plan for individual workers offers before it vanishes. We restructure your entire financial life to extract maximum value from temporary provisions while building permanent wealth through strategies most CPAs never mention.
Contact SWAT Advisors now before these benefits disappear forever.
FAQs
Trump’s tax plan for individuals permanently locks in the seven-bracket structure (10%-37%) from 2017 while adding four temporary deductions through December 31, 2028: qualified tips up to $25,000, overtime premium pay up to $12,500 for singles, car loan interest up to $10,000 on U.S.-assembled vehicles, and an extra $6,000 for taxpayers 65 and older. These temporary breaks phase out at $150,000 AGI for singles and $300,000 for married filers.
Trump’s new tax plan for individual filers keeps identical bracket thresholds from 2017, with annual inflation adjustments built in. For 2026, singles hit the 37% top rate at $640,600 versus the old 39.6% rate that would've kicked in at $523,600. The 24% bracket now covers singles earning $105,701 to $201,775 instead of the former 28% rate that started at $91,900.
No. The law permanently freezes the seven rates at 10%, 12%, 22%, 24%, 32%, 35%, and 37% that started in 2018. Without this legislation, rates would've jumped back on January 1, 2026, pushing the top bracket to 39.6% and bringing back the 28%, 33%, and 36% middle brackets.
Yes. The Trump tax plan for individuals keeps the doubled standard deduction permanent while capping itemized SALT deductions at $10,000 and mortgage interest on $750,000 in debt. The four new temporary deductions for tips, overtime, car loans, and seniors create $56,500 in maximum combined write-offs for a married couple over 65 who both receive tips and work overtime.
Right now, the temporary deductions expire on December 31, 2028. Service workers should start documenting qualified tips immediately, overtime earners need to separate premium pay from regular wages on paystubs, car buyers should verify U.S. assembly before financing, and anyone turning 65 should claim the senior deduction starting with their 2025 return filed in 2026.
