Tax Changes from the “One Big, Beautiful Bill”

Signed into law last Friday, the One Big, Beautiful Bill makes some of the most significant tax changes in recent years. While it’s been widely covered in the news, here’s a quick look at what’s changing—and what might matter most to you.

📉 Lower Tax Rates Made Permanent

The individual tax rates from the 2017 Tax Cuts and Jobs Act are now permanent. That means the expected increase in 2026 won’t happen—keeping tax brackets lower for most households.

🏡 Higher SALT Deduction Cap

The cap on the State and Local Tax (SALT) deduction increases from $10,000 to $40,000 through 2030, offering relief to homeowners in high-tax states.

💵 “No Tax on Tips and Overtime” Deduction

Up to $25,000 in cash tips and overtime pay will be excluded from federal taxable income for certain lower- and middle-income workers. (IRS guidance on exact qualifications is still pending.)

📉 Bonus Depreciation Made Permanent

Business owners can continue to deduct 100% of qualifying equipment, vehicles, and other assets in the year placed in service—helping improve cash flow and reduce taxable income immediately.

🚗 Auto Loan Interest Deduction

From 2025–2028, buyers can deduct up to $10,000 of interest on loans for U.S.-assembled vehicles. Income limits apply.

👶 New “Trump Accounts”

Tax-deferred savings accounts for children, with an optional initial tax credit per child. Rules for withdrawals, taxation, and qualifying expenses are still being finalized.

👧 Child Tax Credit Increase

The credit rises from $2,000 to $2,200 per child and will now be indexed to inflation. The refundable portion remains unchanged.

🧓 Senior Standard Deduction Increase

For 2025–2028, the additional standard deduction for taxpayers aged 65+ increases to $6,000. This is intended to ease the tax burden on retirees but does not eliminate taxes on Social Security benefits.

🌱 Green Energy Credit Rollbacks

Several clean-energy incentives from the Inflation Reduction Act are reduced or eliminated, favoring traditional energy. This may affect planned solar, EV, and other green-energy projects.

📌 In Summary

• Families: Lower tax rates continue, and the Child Tax Credit increases modestly.

• Homeowners: A much larger SALT deduction cap offers new savings.

• Retirees: A larger standard deduction helps offset income taxes.

• Workers: New deduction may apply for tips and overtime.

• Business owners: Bonus depreciation is back—and here to stay.

• Green energy buyers: Fewer tax incentives starting in 2025.

If you’d like a deeper dive into how these changes might affect your 2025 tax planning, I’m happy to walk through the specifics for your situation.