The tax brackets and lower tax rates created in the Tax Cuts and Jobs Act of 2017 (TCJA) are made permanent with the OBBB. Without this legislation, the rates and brackets were set to revert to the levels prior to the TCJA. Avoiding that reversion leads to lower individual federal income taxes for most taxpayers.

The law also adds an additional year of inflation adjustment to the 10 percent, 12 percent and 22 percent brackets for 2025, resulting in bracket thresholds that are larger than they would otherwise be absent this additional year of inflation. These will be the starting points for future increases after 2025.