On July 4, 2025, President Trump signed into law a landmark piece of legislation known as the One Big Beautiful Bill Act (“Act”). The provisions of the Act represent the most comprehensive tax law changes since the 2017 Tax Cuts and Jobs Act (“TCJA”). In many instances, the Act makes permanent or modifies the law created by TCJA.
The Act brings significant changes to the tax landscape, some of which make provisions from the TCJA permanent. These changes affect everything from standard deductions to tax brackets, providing clarity and stability for taxpayers.
Some provisions from the TCJA are now made permanent beginning in 2025 under the Act. Three of these are:
The seven income tax brackets introduced by the TCJA are here to stay:
The $750,000 mortgage debt limit has been made permanent and mortgage insurance premiums may now be treated as mortgage interest and deducted.
Several new provisions will take effect starting in 2025. These include both tax deductions and credits aimed at benefiting a wide range of taxpayers:
In addition to taking the standard deduction or itemizing deductions, qualified seniors (age 65 and older) are entitled to deduct another $6,000 from their income. The deduction for single filers starts to be reduced once income reaches $75,000 and is eliminated at $175,000. For joint filers, the deduction begins to be reduced at $150,000 of income and is eliminated at $250,000 of income.
The cap on state and local tax (SALT) deductions is raised to $40,000 for those making less than $500,000, benefiting taxpayers in high tax states.
A new deduction allows certain workers to exclude income up to $12,500 from their income.
Those in certain service industries can now deduct up to $25,000 in tips received.
The Child Tax Credit is now permanent and increased to $2,200.
A deduction for interest paid on car loans is now available of up to $10,000 for cars that have a final assembly in the United States.
Two popular credits – for clean vehicle purchases and residential energy efficiency – have been repealed under the new law.
Some provisions of the Act will take effect a bit later, in 2026. Here is what to expect:
A new savings account designed to help parents save for their children’s future expenses is created. For babies born between 2025 and 2028, the government will make a one-time contribution per child of $1,000 and parents can contribute up to $5,000 annually.
Taxpayers who claim the standard deduction, meaning they do not itemize deductions, will now be able to claim a charitable deduction in addition to the standard deduction of up to $1,000.
Permanently increases the estate, gift, and generation-skipping transfer tax exemption amount to $15,000,000, with annual inflation adjustments.
The Act offers both permanent and temporary provisions that will affect everyone, from retirees to families and small business owners. The law aims to bring more financial security to taxpayers.
As we move into 2026 and beyond, it is important to stay updated on how these changes will impact your tax situation. Whether you are a senior looking for deductions, a parent hoping for an expanded Child Tax Credit, or someone who benefits from the SALT deduction, there is a lot to navigate in this new tax landscape.
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