The “One Big Beautiful Bill” (signed in July 2025) introduces a number of important changes that affect everyday taxpayers, not just the wealthy. First, the standard deduction is raised for 2025: single filers can claim $15,750, and married couples filing jointly can claim up to $31,500. In addition, taxpayers age 65 and older qualify for an extra $6,000 “senior deduction” (per person) above and beyond the standard deduction; for a couple both over 65, that means an additional $12,000 — subject to phase‑outs for those with higher income (starting at $75,000 for individuals and $150,000 for joint filers).
Another change that may provide relief, particularly in high-tax states, is the temporary increase in the SALT (state and local tax) deduction cap. For 2025, that cap is boosted from $10,000 to $40,000 (or $20,000 for married filing separately). However, the increased cap begins phasing out for taxpayers with MAGI above $500,000 and is fully eliminated at $600,000.
Other notable new deductions include:
- No tax on tips: From 2025 through 2028, certain service industry workers may deduct tip income from federal taxes.
- No tax on overtime half-pay: Workers can deduct the “extra” portion of overtime wages (the 50% time-and-a-half differential), up to $12,500 for individuals or $25,000 for joint filers.
- Child tax credit expansion: The credit increases to $2,200 per qualifying child, with up to $1,700 refundable.
Finally, several popular tax cuts originally passed in the 2017 TCJA are made permanent, including the lower income tax brackets, the higher standard deduction, and the cap on mortgage interest deductions for acquisition debt up to $750,000.
Have some questions? Schedule an appointment with us to discuss how to mitigate tax liability within your financial plan and saving strategy, and don’t forget to talk to your accountant or CPA about these changes come tax time!
Citations
- Internal Revenue Service. “One Big Beautiful Bill: Key 2025 Tax Provisions.” IRS.gov. Updated July 22, 2025. https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions.
- HSF Kramer LLP. “Tax Provisions in the One Big Beautiful Bill Act: A Comprehensive Analysis.” HSF Kramer Tax Bulletin, July 2025. https://www.hsfkramer.com/en_US/insights/2025-07/tax-provisions-in-the-one-big-beautiful-bill-act.
- Loeb & Loeb LLP. “The One Big Beautiful Bill Act: Breaking Down Key Changes in the New Tax Legislation.” Loeb.com, July 25, 2025. https://www.loeb.com/en/insights/publications/2025/07/the-one-big-beautiful-bill-act-breaking-down-key-changes-in-the-new-tax-legislation.
- CNBC. “Here’s When Provisions from Trump’s ‘Big Beautiful Bill’ Go into Effect.” CNBC.com, July 11, 2025. https://www.cnbc.com/2025/07/11/when-provisions-from-trumps-big-beautiful-bill-go-into-effect.html.
- U.S. Bank. “The Real Impact of the Tax Cuts and Jobs Act: What It Means in 2025.” USBank.com. Accessed October 8, 2025. https://www.usbank.com/wealth-management/financial-perspectives/financial-planning/the-real-impact-of-the-tax-cuts-and-jobs-act.html.