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| The New Tax Bill - What It Means For You
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The bill was signed into law on July 4. The One Big Beautiful Bill Act of 2025 locks in tax cuts and adds several new tax breaks aimed at workers, families, and seniors. Here's what changes in 2025.
Key Tax Changes
Tax rates stay the same. The current brackets (10% to 37%) from the 2017 tax law are now permanent.
Standard deduction goes up. Married couples: +$1,500 Heads of household: +$1,125 Single filers: +$750
New senior deduction (2025–2028).Seniors can deduct an extra $6,000.
The benefit phases out: Single: $75,000–$175,000 Married: $150,000–$250,000
Child tax credit increases to $2,200, up from $2,000.
Work & Wage Benefits
Tips deduction (2025–2028). Up to $25,000 in qualified tips is tax-deductible for both employees (W-2) and
contractors (1099-NEC). The deduction phases out above: Single: $150,000 Married: $300,000.
Overtime deduction (2025–2028). Deduct up to: Single: $12,500 Married: $25,000 for qualified overtime pay.
Other Provisions of the OBBBA of 2025
Vehicle loan interest deduction (2025–2028). Deduct up to $10,000 in interest on loans for new US
assembled vehicles.
Student loan forgiveness due to death or disability is now permanently non-taxable.
State and local tax (SALT) deduction cap rises to $40,000 (from $10,000) through 2029. It drops back to
$10,000 in 2030.
Electric vehicle tax credits end Sept. 30, 2025. New EVs: Up to $7,500 Used EVs: Up to $4,000
Adoption tax credit expanded. Up to $5,000 of the credit is refundable for low-income families.
New Trump Accounts for kids. $1,000 gifted at birth (2025–2028 births only) Up to $5,000 per year in
contributions allowed Withdrawals allowed starting at age 18
Expanded 529 plan use.New $20,000 annual withdrawal cap for K-12 tuition. Can now be used for books,
tutoring, homeschool, therapies, and certificate/trade programs
2026 Upcoming Changes
Everyone can now deduct donations without itemizing. Single: Up to $1,000 Married: Up to $2,000.
Itemizing donations is getting tougher! You can only deduct the part of your donations that exceed
0.5% of your income. IE: If you make $100,000 and you donate $10,000, only $9,500 is deductible.
Mortgage insurance premiums are now deductible if you itemize.
Top earners see an itemized deduction cap. If you're in the 37% bracket, your itemized deductions
can only reduce tax up to a 35% rate.
Gambling Losses. There is a new limit. You can now only deduct 90% of your gambling losses. Under the
old rule you could deduct your losses up to the amount of your winnings. If you won $15,000 and lost
$20,000, you could deduct $15,000. The new rule limits the deductible amount to 90% of your winnings,
so your deduction would be $13,500.
New Trump Accounts for kids. $1,000 gifted at birth (2025–2028 births only) Up to $5,000 per year in
contributions allowed Withdrawals allowed starting at age 18.
New Remittance Excise Tax. There is a new 3.5% excise tax applies to personal remittance transfers sent
to foreign recipients
Call us today for an appointment to discuss your tax situation. (727) 642-1709
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