On July 4, 2025, President Donald Trump signed into law the “One Big Beautiful Bill Act,” a sweeping tax and spending package that reshapes the U.S. tax landscape. Clocking in at nearly 900 pages, this legislation touches everything from individual deductions to business incentives, and even estate planning. Whether you’re a salaried worker, a small business owner, or planning your legacy, here’s what you need to know.
Individual Tax Changes:
Permanent Extension of 2017 Tax Cuts
- The bill locks in the lower tax rates introduced by the 2017 Tax Cuts and Jobs Act (TCJA), avoiding the scheduled sunset in 2026.
- Brackets remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with inflation adjustments.
Standard Deduction Boost
- Raised to $15,750 for single filers and $31,500 for joint filers in 2025.
- Adjusted annually for inflation.
Senior Bonus Deduction
- Taxpayers aged 65+ can claim an additional $6,000 deduction through 2028.
Phaseout Thresholds:
Single Filers:
- Full deduction ($6,000) available up to $75,000 in modified adjusted gross income (MAGI)
- Fully phased out at $175,000
Married Filing Jointly
- Full deduction ($12,000) available up to $150,000 in modified adjusted gross income (MAGI)
- Fully phased out at $250,000
Child Tax Credit
- Increased from $2,000 to $2,200 per child starting in 2025.
- Refundable portion is $1,700 for 2025.
No Tax on Tips and Overtime
- Up to $25,000 in tips and $12,500 in overtime pay can be deducted annually through 2028.
- Phases out between $150,000-$250,000 MAGI (single) and $300,000-$400,000 (MFJ)
State and Local Tax (SALT) Deduction
- Temporarily raised from $10,000 to $40,000 in 2025, with gradual increases through 2029.
- Reverts to $10,000 in 2030.
- Phases out between $500,000-$600,000 MAGI for single and joint filers.
Other Notable Deductions
- Auto Loan Interest: Deduct up to $10,000 in interest on U.S.-assembled vehicles through 2028.
- Charitable Contributions: Non-itemizers can deduct up to $2,000; itemizers face a new 0.5% floor.
- Alternative Minimum Tax (AMT): Higher exemption amounts made permanent.
Other Changes:
100% Bonus Depreciation Restored
- Businesses can fully expense qualifying assets purchased after Jan.19, 2025.
- Applies to equipment, renovations, and more.
Qualified Business Income (QBI) Deduction
- Made permanent for pass-through entities like S-corps and partnerships.
Estate & Gift Tax Updates
- Exemption increased to $15 million per individual starting in 2026.
- Indexed for inflation, allowing more tax-free wealth transfers.
Here is a chart that compares old legislation with the new tax law:
Current Law
Final legislation
Standard Deduction
$15,000 single; $30,000 married filing jointly for 2025
$15,750 single; $31,500 married filing jointly for 2025
'Bonus' Deduction for Older Adults
State and Local Tax Deduction (SALT)
$10,000 limit through 2025
$40,000 limit for 2025; increases by 1% through 2029; reverts to $10,000 in 2030
Child Tax Credit
Estate and Gift Tax Exemption
Tax on Tips
Overtime Pay
Auto Loan Interest
Deduct up to $10,000 of annual interest on new loans from 2025 through 2028
Trump Accounts for Child Savings
One-time $1,000 credit to account per child born between 2025 through 2028
Charitable Deduction for Non-Itemizers
$1,000 single; $2,000 married filing jointly; permanent after 2025
Final Thoughts:
There is a common misconception around these tax changes regarding taxation of Social Security benefits. Despite prior statements from the current administration, there is no effective change to the taxation of Social Security benefits specifically that resulted from this bill. Any comments on reduced taxes for those who are currently collecting Social Security are in reference to the added “bonus” deduction for seniors as listed above.
The “Big Beautiful Bill” is a mixed bag of tax relief, business incentives, and policy reversals. While many Americans will benefit from lower taxes and expanded deductions, others—especially in high-tax states or green energy sectors—may feel the pinch. As always, consult a tax professional to understand how these changes affect your specific situation.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.
