Your 2025 Tax Filing Guide (Copy) (Copy)
New Tax Rules for 2025
What We'll Cover
Tax law is changing again — and for millions of Americans, the impact starts in 2025.
In the first Trump administration, the Tax Cuts and Jobs Act (TCJA) of 2017 brought sweeping reforms. Many of its provisions were set to expire at the end of 2025, which meant most Americans were on track to see higher taxes in 2026.
Enter the One Big Beautiful Bill Act — a new piece of legislation that extends and reshapes many provisions of the TCJA. While some changes will take effect as early as 2025, others won’t arrive until later. Here’s what’s changing and what it could mean for you.
Higher Standard Deductions & Tax Brackets
For 2025, the standard deduction will rise to $15,750 for single filers, $23,625 for heads of household, and $31,500 for married couples filing jointly. This change reduces taxable income for most households and provides meaningful relief across the board.
Standard Deduction: 2024 vs 2025
Child Tax Credit
The Child Tax Credit increases from $2,000 to $2,200 per child starting in 2025, and it will now adjust annually for inflation. Phaseout thresholds remain fixed at $200,000 for single filers and $400,000 for married couples filing jointly. This expansion is designed to ease the pressure of rising costs for working families.
SALT Deduction Expansion
The cap on state and local tax (SALT) deductions will temporarily expand from $10,000 to as much as $40,000, or $20,000 if married filing separately. This change primarily affects taxpayers in high-tax states such as New York, New Jersey, and California.
Households with income below $500,000 may be eligible for the full $40,000 deduction, while those above roughly $600,000 will see little to no benefit. For many, this represents an opportunity to capture significant deductions during the five-year window before the provision expires.
New Temporary Deductions
Several short-term measures were introduced to support seniors, working families, and certain industries. Individuals aged 65 and older will receive an additional $6,000 deduction, or $12,000 for couples. Borrowers may deduct up to $10,000 in annual interest on loans for U.S.-assembled vehicles, subject to income limits. And workers may now deduct up to $25,000 in tip income and $12,500 in qualified overtime.
These provisions, though temporary, may encourage some taxpayers to itemize deductions rather than default to the standard deduction.
Supporters Say
Advocates of the bill point to the tangible benefits for households: more money in working families’ pockets, expanded opportunities for retirement savers through higher contribution limits and Roth flexibility, and meaningful relief for seniors living on modest incomes.
Critics Say
Opponents argue that the bill carries steep costs, estimating it could add around $5 trillion to the national debt over the next decade. The Congressional Budget Office has also warned that changes to Medicaid and ACA funding could leave more than 10 million Americans without health coverage by 2030. Critics add that the largest tax breaks still flow disproportionately to wealthier households, potentially widening inequality.
Federal Debt Projected to Reach Record Levels
This chart shows the federal debt owed to outside investors. It doesn’t include money the government owes itself, like Social Security. That’s why it’s considered a clearer picture of the nation’s debt.
The One Big Beautiful Bill Act offers real tax relief, but most of its provisions are temporary, and the long-term fiscal and equity impacts remain uncertain.
For families, retirees, and business owners, the most important step is planning ahead. Today’s lower rates, higher deductions, and expanded credits create opportunities, but those opportunities come with an expiration date.
If you haven’t already, let’s schedule a time to review how these changes impact your tax plan, retirement strategy, and long-term goals — so you’re well-prepared before 2026 arrives.
Disclosures
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