One Big Beautiful Bill: A Game-Changer for U.S. Taxes 

On July 4, 2025, President Trump signed into law a landmark piece of legislation known as the One Big Beautiful Bill Act (“Act”). The provisions of the Act represent the most comprehensive tax law changes since the 2017 Tax Cuts and Jobs Act (“TCJA”).  In many instances, the Act makes permanent or modifies the law created by TCJA. 

Key Takeaways from the One Big Beautiful Bill 

The Act brings significant changes to the tax landscape, some of which make provisions from the TCJA permanent. These changes affect everything from standard deductions to tax brackets, providing clarity and stability for taxpayers. 

Permanent Changes to the Tax Code 

Some provisions from the TCJA are now made permanent beginning in 2025 under the Act. Three of these are: 

• Standard Deduction: 

  • For single filers, the deduction is set at $15,750. 

• • For heads of households, it increases to $23,625. 

• • For married couples filing jointly, it stands at $31,500. 

• Tax Brackets:

  The seven income tax brackets introduced by the TCJA are here to stay: 

  • 10%, 12%, 22%, 24%, 32%, 35%, and 37%. 

• Qualified Residence Interest Deduction:

  The $750,000 mortgage debt limit has been made permanent and mortgage insurance premiums may now be treated as mortgage interest and deducted. 

New Changes Starting in 2025 

Several new provisions will take effect starting in 2025. These include both tax deductions and credits aimed at benefiting a wide range of taxpayers: 

• Increased Deduction for Seniors:

  In addition to taking the standard deduction or itemizing deductions, qualified seniors (age 65 and older) are entitled to deduct another $6,000 from their income. The deduction for single filers starts to be reduced once income reaches $75,000 and is eliminated at $175,000.  For joint filers, the deduction begins to be reduced at $150,000 of income and is eliminated at $250,000 of income. 

• SALT Deduction Cap Increase

  The cap on state and local tax (SALT) deductions is raised to $40,000 for those making less than $500,000, benefiting taxpayers in high tax states. 

• Overtime Pay Deduction:

  A new deduction allows certain workers to exclude income up to $12,500 from their income. 

• Tips Received Deduction:

  Those in certain service industries can now deduct up to $25,000 in tips received. 

• Expanded Child Tax Credit:

  The Child Tax Credit is now permanent and increased to $2,200. 

• Car Loan Interest Deduction:

  A deduction for interest paid on car loans is now available of up to $10,000 for cars that have a final assembly in the United States. 

• Elimination of Clean Vehicle and Residential Energy Credits:

  Two popular credits – for clean vehicle purchases and residential energy efficiency – have been repealed under the new law. 

Looking Ahead: Changes Coming in 2026 

Some provisions of the Act will take effect a bit later, in 2026. Here is what to expect: 

• Trump Child Savings Accounts

  A new savings account designed to help parents save for their children’s future expenses is created. For babies born between 2025 and 2028, the government will make a one-time contribution per child of $1,000 and parents can contribute up to $5,000 annually. 

• Charitable Deduction for Non-Itemizers:

  Taxpayers who claim the standard deduction, meaning they do not itemize deductions, will now be able to claim a charitable deduction in addition to the standard deduction of up to $1,000. 

• Estate and Gift Tax Exemption:

  Permanently increases the estate, gift, and generation-skipping transfer tax exemption amount to $15,000,000, with annual inflation adjustments.    

What Does This Mean for You? 

The Act offers both permanent and temporary provisions that will affect everyone, from retirees to families and small business owners. The law aims to bring more financial security to taxpayers. 

As we move into 2026 and beyond, it is important to stay updated on how these changes will impact your tax situation. Whether you are a senior looking for deductions, a parent hoping for an expanded Child Tax Credit, or someone who benefits from the SALT deduction, there is a lot to navigate in this new tax landscape. 

If you have questions and would like to talk with us further, please call us at 513-271-6777. For more THOR reading, click here to go to the Blogs and Market Updates section on our website. Follow us on social media: 

• YouTube 

• LinkedIn 

• Facebook