Let’s talk about the new One Big Beautiful Bill Act (OBBBA) from 2025. It’s a big update to our tax rules that can help many families, businesses, and seniors save money. We’ll keep it simple and clear, just like always.
A Quick Overview
The OBBBA builds on old tax cuts and adds new ways to lower what you owe. It helps middle and high earners, especially families and older folks. You might see your taxes drop by 2-5%, but some perks fade at higher incomes or end by 2028. This is great for planning your estate, business costs, and family help. But watch for IRS updates – things could change a bit.
Why This Matters Now
This law passed in mid-2025 to boost our economy and give relief where needed. It keeps good parts from the 2017 tax act and adds fresh ideas, like no tax on tips or overtime for some. We looked at it closely to help clients like you. It starts for taxes in 2025, but states might handle it differently.
The 15 Key Tax Changes
Here are the main updates in short form. Each one has a link to dive deeper with more details and tips just for you. You’re in good hands with our team – we aim to be the most responsive tax firm in America.
- Standard Deduction Goes Up in the One Big Beautiful Bill: Now $15,750 for singles, $23,625 for heads of household, and $31,500 for married couples. It stays forever and grows with costs. This cuts your taxable income without listing expenses.
- One Big Beautiful Bill gives Extra Help for Seniors: Folks 65 and up get a $6,000 deduction ($12,000 if both spouses qualify). It helps with Social Security taxes but ends in 2028 and fades if income is over $75,000 single or $150,000 married.
- Bigger Child Tax Credits in 2025: $2,200 per kid under 17, with $1,700 back if you owe less. It’s forever and adjusts for inflation. Plus, more help for child care costs. Starts fading at $200,000 income single or $400,000 married.
- No Tax on Tips and Overtime: Up to $25,000 in tips or $12,500 overtime ($25,000 married) skips income tax. For tipping jobs and extra work hours, but ends in 2028. Fades over $150,000 single or $300,000 married. Still pay Social Security tax.
- Deduct Auto Loan Interest: Take off up to $10,000 interest on loans for new U.S.-made cars. For personal use only, ends in 2028. Fades over $100,000 single or $200,000 married.
- Charity Gifts Deduction for All: Even if you don’t list expenses, deduct up to $1,000 cash gifts ($2,000 married). It’s forever. For those who do list, a small floor applies.
- Trump Accounts for Kids: Like savings plans for college, but wider use. Put in $5,000 a year per child under 18, get a $1,000 credit, and growth is tax-free. Use at 18 for school, home, or more.
- Tax on Big College Funds: Some private schools with huge funds per student pay 2% tax on earnings, up from 1.4%. Helps raise money from rich endowments.
- Tax Brackets Stay the Same: The seven levels from 2017 (10% to 37%) are forever, no jump back to higher rates. They adjust for rising costs.
- Business Income Deduction: 20% off for pass-through businesses, up to 23% for small ones. Forever, but fades for high earners in services like doctors over $182,100 single.
- Higher Estate Tax Limit: $15 million per person ($30 million married) starts in 2026, forever and adjusts up. Protects more wealth from tax when passed on.
- More Room for State Taxes Deduction: Cap goes to $40,000 ($20,000 if married separate), through 2029. Fades over $500,000 income, back to $10,000 in 2030.
- Full Bonus for Business Buys: Write off 100% of new equipment costs right away, forever. No slow drop like before.
- Opportunity Zones Better: Program lasts forever, new areas in 2026, stricter rules, extra perks for rural spots if held long. Delays taxes on gains invested there.
- Changes for Overseas Income: Lower effective tax on some foreign earnings to 10.5%, tweaks to favor U.S. work. Helps companies with global ties.
How This Helps You
These updates fit many lives. Doctors and pros can plan businesses and estates better. Families save on kids and school. Seniors get relief on fixed income. If you have overseas work, it might cut taxes there too. In real estate, zones help delay taxes on investments.
Easy Steps to Get Started
- Check your 2025 taxes with our tools to see savings.
- Time car buys or gifts to grab deductions before they end.
- Set up Trump Accounts soon for kids to start saving tax-free.
- Update your estate plan with the bigger limit, maybe with trusts.
- Watch for new IRS forms and fix old returns if needed.
- For high earners, lower income smartly with gifts or delays.
Things to Keep in Mind
Some perks are short-term, so plan ahead. They fade at higher incomes, and IRS rules might add details. States may not match all changes, and mistakes could lead to checks. We care about you, so let’s chat about your setup. No big risks if we stay on top.
