What does the new tax bill mean for you?

The 2025 Reconciliation Legislation, also known as the One Big Beautiful Bill Act (OBBBA), brings a mix of tax cuts, expanded deductions, and some repeals, starting in 2025 and continuing into 2026.

Below is a summary of how it could affect you personally depending on your situation.

We’re here to help you navigate these changes and to understand how it affects your taxes. Below is a summary of the plan. All changes outlined below are subject to limitations & phase-outs.

If You’re 65 or Older

Additional $6,000 deduction on top of standard/itemized deduction

If You Take the Standard Deduction

Standard Deduction Increase:
Married couples: increase of $1,500.
Head of household: increase of $1,125.
Singles: increase of $750.

If You Live in a High-Tax State

The state & local tax (SALT) deduction provides a federal deduction for income and property taxes paid at the local and state level.

If You Work Overtime or Receive Tips

No Tax on Overtime Pay(2025 – 2028)
No Tax on Tips (2025 – 2028)

If You Use Apps like Venmo, PayPal or eBay

Reportable transactions threshold changed to Over $20,000 and 200 transactions

If You Have Kids

The Child Tax Credit has increased to $2,200 per child and will be adjusted for inflation annually.

If You’ve Adopted or Are Adopting

You can get money back even if you owe no tax

If You Use a Section 529 Plan for Education

Expanded eligible expenses

If You Plan to Buy a Car

Deduct up to $10,000 in interest on new auto loans

If You’re a Small Business Owner

Permanently extends the deduction for qualified business income at 20%

What’s Going Away

Clean Vehicle Credits: Repealed after September 30, 2025
Residential Energy Credits: Gone after 2025

Changes affecting your 2026 tax return:

Charitable contributions

Now deductible even with the standard deduction
Individuals: up to $1,000
Married couples: up to $2,000

Mortgage insurance premiums

Available to those who itemize beginning with tax year 2026.

Gambling losses

Reduction in the limit of deductible gambling losses (limited to 90%, down from 100%)