On July 4, 2025, President Trump enacted the One Big Beautiful Bill ACT (OBBBA). We want to highlight the key provisions that impact individuals and families.

Brackets & Standard Deduction

The OBBBA makes the tax rates enacted in 2017 permanent—10%, 12%, 22%, 24%, 32%, 35%, and 37%—with the tax bracket amounts indexed for inflation.

Standard Deductions for 2025:

  • Single (S) & Married Filing Separately (MFS): $15,750
  • Married Filing Jointly (MFJ): $31,500
  • Head of Household (HOH): $23,625

Enhanced deduction for seniors: A $6,000 exemption is available for seniors (65+) with income under $75,000 (Single) or $150,000 (MFJ) through 2028.

State and Local Tax (SALT) Deduction Cap Relief

  • Starting in 2025, the SALT cap is increased from $10,000 to $40,000 ($20,000 MFS). It is phased out for income over $500,000 ($250,000 MFS).
  • In 2030, the SALT deduction reverts to $10,000.

Charitable Contribution Deduction

  • For those who claim the standard deduction, beginning in 2026, cash charitable contributions of $1,000 (Single / MFS) or $2,000 (MFJ) can be deducted.
  • For those who itemize: beginning in 2026, only contributions exceeding 0.5% of Adjusted Gross Income (AGI) will be deductible. The 60% AGI limit was made permanent.

Home Mortgage Interest and Insurance Premiums

The $750,000 limit on the treatment of mortgage insurance premiums as qualified residence interest is made permanent. The exclusion of home-equity indebtedness from the definition of qualified residence interest is also now permanent.

Moving Expense Deduction

The deduction is permanently terminated except for those in the Armed Forces.

Casualty Loss Deduction for Personal Casualties

The limitation on personal casualty loss deductions is made permanent; however, a provision is added to include state-declared disasters.

New Income-Based Deductions

Available for 2025 to 2028:

  • Qualified tips (in certain occupations) and overtime premium pay deduction up to $25,000, subject to income phase-out $150,000 (Single) and $300,000 (MFJ)
  • Car loan interest deduction up to $10,000 for US-assembled passenger vehicle,s subject to income phase-out $100,000 (Single) and $200,000 (MFJ)

Education Benefits

Employer-paid education aid is permanently tax-free up to $5,250 per year. 529 plan K-12 withdrawal limit raised to $20,000 and now usable for books and online learning.

Expanded Family Tax Credits

  • Beginning in 2025, the Child Tax Credit increases to a max of $2,200 per qualified child, with a $1,400 refundable portion indexed for inflation. A valid SSN is required.
  • Beginning in the 2025 tax year, there is a maximum refundable Adoption Credit of $5,000 indexed for inflation.

Trump Accounts: A New Savings Option for Young Children

‘Trump accounts’ are a new type of tax-advantaged savings accounts allowing up to $5,000 annual after-tax contribution for children under 18 with a valid SSN. Earnings grow tax-deferred, and no distribution can be taken until the child turns 18. We advise caution until more IRS guidance is available.

Estate & Gift Tax Exemption

The lifetime exemption permanently increases to $15 million per person ($30 million for married couples), effective January 1, 2026, indexed for inflation.

Other Notable Updates

  • Gambling loss deductibility is capped at 90% of winnings.
  • Miscellaneous itemized deductions are permanently repealed. However, unreimbursed employee expenses for eligible educators are still deductible.
  • The Form 1099 reporting threshold increases to $2,000 for 2026, indexed for inflation.
  • Form 1099-K, Payment Card and Third Party Network Transactions, reporting reverts back to previous rules where reporting is required if transactions exceed $20,000 and the aggregate number of transactions exceeds 200.
  • Several clean energy credits are terminated.

We are here to help

We will continue to closely monitor any potential regulatory guidance as it’s developed from the IRS and update you accordingly as new details become available. Our goal is to ensure you’re informed, prepared, and supported — every step of the way.

Our team is available to discuss how these provisions may impact your tax situation and to help you plan accordingly. Please don’t hesitate to contact us with any questions or schedule a consultation with your LGA Advisor.