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Clean Vehicle Credits: Repealed after September 30, 2025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%)