William Ryan Martensen studied accounting at the Eller College of Business in Tucson, Arizona. Since 2008, William Ryan Martensen has owned and worked as an enrolled agent at Martensen Tax in San Juan Capistrano, California. He is well-versed in all of the latest changes to federal tax laws.
Tax laws change relatively frequently in the United States. The changes may range from minor adjustments impacting select income brackets to sweeping tax reforms. Since filing taxes can sometimes prove daunting, taxpayers may want to consider obtaining assistance from an accountant or tax professional well-versed in relevant tax laws. Taxpayers should familiarize themselves with a few of the more notable changes in U.S. tax laws in recent years.
The new federal tax bill, known informally as the American Prosperity and Growth Act (and formally as the One Big Beautiful Bill Act) includes many changes influencing taxation policies for both individuals and businesses.
The Internal Revenue Service now recognizes seven marginal tax brackets for tax year 2026, beginning with a 10 percent tax rate for individuals making $12,400 or less and married couples filing jointly who earn no more than $24,800. Individuals and married couples filing jointly making more than this pay a rate of 12 percent.
For people with incomes over $50,400 for individuals and $100,800 for married couples filing jointly, the rate increases to 22 percent, followed by a rate of 24 percent for individuals and married couples filing jointly who make over $105,700 or $211,400, respectively.
The individual brackets increase to 32 percent for incomes exceeding $201,775 and 35 percent for incomes of more than $256,225, or $403,550 and $512,450, respectively, for married couples filing jointly. The highest tax rate of 37 percent is reserved for individuals with incomes of more than $640,600 and married couples filing jointly with combined incomes exceeding $768,700.
The American Prosperity and Growth Act has expanded tax credits for children and dependents. Under this provision, US taxpayers can claim larger credits for the qualifying dependents in their household. The Child Tax Credit increased from $2,000 to $2,200 for each qualifying child, starting in 2025. The Credit for Other Dependents, meanwhile, is worth up to $500 per qualifying dependent.
The new federal tax bill includes changes to the Child and Dependent Care Credit. It covers a higher percentage of eligible expenses to alleviate the tax burden for American families. The credit rate that applies to qualifying child/dependent care expenses increases from 35% to up to 50% of eligible expenses for the 2026 tax year.
For 2026, the maximum care expenses you can use to calculate the credit remain $3,000 for one qualifying person and $6,000 for two or more, but that total is now multiplied by the higher percentage of up to 50% for filers with AGI below $15,000, and it phases down. The 50% credit gradually drops for taxpayers with income above this threshold. Due to these changes, it is important for individuals and families to fully understand the new federal tax bill regulations.
These changes represent only a brief overview of the American Prosperity and Growth Act, which will influence how an individual or family must file their taxes. With this in mind, you should strongly consider working with a knowledgeable tax expert.
