07/28/2025
I know you guys heard of the big beautiful bill that Trump approved. Here's a few things to know:
The Big Beautiful Bill makes many of the 2017 Tax Cut and Jobs Act tax law changes permanently while adding some temporary and permanent changes to the tax code.
A few of the new tax laws of the Big Beautiful Bill are in effect for your 2025 taxes (which you'll file in 2026), but most of the changes won't take effect until 2026 and later.
This bill keeps many of the Tax cuts job act tax items, including the larger Standard Deduction, elimination of personal and dependent exemptions, lower tax brackets, and elimination of, or limits on, certain itemized deductions.
There's no tax on tip or overtime income for certain workers. Now this could be good for the now, but will affect your return if you're use to the income boosting your return.
It permanently extends tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to taxes on tips and overtime for certain workers, reforms Medicaid, increases the Debt ceiling, and reforms Pell Grants and student loans.
no tax on tips - deduction of up to $25,000 per taxpayer with phaseout for Modified Adjusted Gross Income (MAGI) over $150,000 (over $300,000 for Married Filing Jointly filers)
no tax on overtime - deduction of up to $12,500 per taxpayer with phaseout for MAGI over $150,000 (over $300,000 for Married Filing Jointly filers)
increased Child Tax Credit - increased from $2,000 to $2,200 for qualified taxpayers
additional senior deduction (2025 through 2028) - additional $6,000 deduction for taxpayers 65 and older with phaseout for MAGI over $75,000 (over $150,000 for Married Filing Jointly filers)
partially refundable adoption credit - up to $5,000 (adjusted for inflation) refundable
increased state and local tax (SALT) itemized deduction - increased to $40,000 (adjusted annually) for 2026 through 2029.
deduction for interest payments on certain vehicles - up to $10,000 deduction with phaseout for MAGI over $100,000 (over $200,000 for Married Filing Jointly filers)
Trump savings accounts for children - a form of an IRA retirement account with a $1,000 tax credit when opened for a child born between January 1, 2025, and December 31, 2028. Additional contributions are also allowed with distributions beginning after the beneficiary turns 18.
end of the Electric Vehicle Credit as of September 30, 2025
increase in the standard deduction - increases the 2025 Standard Deduction to $15,750 for Single, $23,625 for Head of Household, and $31,500 for Married Filing Jointly filers. These amounts will increase with inflation each year.
Additional items included in the bill mostly having an impact on businesses include:
restoration of 100% bonus depreciation
restoration of expensing of certain R&D costs
100% expensing for certain manufacturing structures (temporary)
increased Section 179 limits
1099-K issuance threshold increase
Other 2025 Tax Law Changes
While the One Big Beautiful Bill has many tax changes, other important updates remain for your tax return from the Tax Cut Job Act that were not impacted by the One Big Beautiful Bill. Some of these include:
Inflation adjustments to deductions and brackets
Income tax brackets, eligibility for certain tax deductions and credits, and the Standard Deduction will all adjust to reflect inflation.
Tax brackets will also be adjusted for inflation with each bracket increasing its range of income. For example, the top end of the 10% tax bracket for a single filer will increase from $11,600 for 2024 to $11,925 for 2025. The 37% rate starts at $609,350 for a single filer in 2024 but doesn't start until $626,350 for 2025.
