One of the most impactful — and least complicated — changes in the OBBB Act is the extension of the current federal income tax rates. The existing brackets of 12%, 22%, 24%, 32%, and 37% are now locked in through 2030.
Without this extension, rates were scheduled to rise in 2026 to 15%, 25%, 28%, 33%, and 39.6%. By keeping today’s lower brackets in place, the legislation provides taxpayers with a more predictable environment for planning.
This stability is especially useful for retirement planning, Roth conversion strategies, business income forecasting, and long-term investment decisions. For many households, the extended brackets may also reduce uncertainty around tax liability as income grows or changes over time.
Sources 1. Congress.gov, July 4, 2025 2. Internal Revenue Service, July 25, 2025. 3. Internal Revenue Service, July 25, 2025.