Tax laws are constantly evolving, and staying informed is key to making smart financial decisions.
On July 4, 2025 President Trump signed The One Big Beautiful Bill act (OBBB) into law. This latest round of tax legislation brings major changes that will impact individual taxpayers over the next few years. From new deductions for seniors and workers to adjustments in charitable giving rules, these updates could affect how much you owe, or save, when tax season rolls around.
As a summary of the individual tax changes and extensions within the One Big Beautiful Bill, following are ten key tax bill tidbits to help you understand what’s changing and how you might benefit.
Senior citizens with modified adjusted gross income (MAGI) of $75,000 or less ($150,000 for couples) will get an additional $6,000 exemption, per person, for tax years 2025 through 2028. The deduction phases out for higher incomes and becomes zero if MAGI is $175,000 ($250,000 for couples).
The cap on the deduction for state and local tax (SALT) has increased from $10,000 to $40,000 for 2025. It will increase slightly each year through 2029 and will return to $10,000 in 2030. The deduction is phased down for taxpayers with MAGI over $500,000, but never lower than $10,000.
Qualified tips generate an above-the-line deduction of up to $25,000 for taxpayers with MAGI up to $150,000 ($300,000 for couples) for tax years 2025 through 2028. The deduction is phased out for higher incomes and is zero when MAGI reaches $400,000 ($550,000 for couples).
Qualified overtime paid pursuant to the Fair Labor Standards Act of 1938 will generate an above-the-line deduction of up to $25,000 for taxpayers with MAGI up to $150,000 ($300,000 for couples) for tax years 2025 through 2028.
Interest paid on new car loans incurred from 2025 through 2028 will create an above-the-line deduction capped at $10,000 for taxpayers with MAGI of up to $100,000 ($200,000 for couples). The deduction is gradually phased out if MAGI exceeds these limits, until the deduction is zero for MAGI of $150,000 ($250,000 for couples).
Trump accounts, which will grow tax-free, can be established for children under age 18. The federal government will contribute $1,000 for children born in 2025 through 2028. There is no income limitation, but there are contribution limits. The basis (original contribution) is withdrawn tax-free, and the earnings are taxed at capital gains rates if used for qualified higher education expenses, purchase of a first home, or to start a business for which a small business loan or small farm loan has been obtained.
Most energy-related tax credits are eliminated, although not all are eliminated immediately.
Beginning in 2026, taxpayers who do not itemize can take deduction of up to $1,000 ($2,000 for couples) for cash contributions made to charity.
Beginning in 2026, taxpayers who choose to itemize their deductions may only deduct charitable contributions that exceed 0.5% of the taxpayer’s contribution base for the tax year.
Beginning in 2026, there is a phaseout of itemized deductions for taxpayers in the 37% tax bracket.
Tax planning doesn’t have to be overwhelming. By understanding these new tax provisions and how they apply to your situation, you can make informed choices to maximize your deductions, minimize your liability, and plan ahead for future changes. If you have questions about how these updates impact you or need help navigating the new rules, reach out to an Alloy Silverstein professional. We are here to help you every step of the way.
Associate Partner
Julie has over 20 years of experience in public and private accounting, representing varied clientele including the medical, legal, and real estate industries and trusts.
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