The new tax law—the one that’s being called The Big Beautiful Bill—brings some major updates starting in tax year 2025 (the taxes you’ll file in early 2026). As we approach the end of the year, make sure you are ready for some changes. If you’re working with a CPA, don’t worry—we’re all up to date on this and following it closely. It’s our job 😊
Key Highlights
- SALT deduction cap raised → Up to $40,000 if income is under $500,000.
- Tip income deduction → Up to $25,000 (2025–2028).
- Overtime deduction → Up to $12,500 (2025–2028).
- Child Tax Credit expansion → $2,200 per child, inflation-adjusted.
- Enhanced deduction for seniors → Up to $6,000 (ages 65+, phased out at $75k/$150k).
- Car loan interest deduction → Up to $10,000 for qualified U.S.-assembled vehicles.
- Qualified Business Income (QBI) deduction → 20% deduction is now permanent.
What’s Going Away
- Energy-efficient home credits (windows, doors, solar, etc.) end after 2025.
- EV tax credits (up to $7,500) end for cars purchased after Sept 30, 2025.
- Personal & dependent exemptions permanently eliminated.
- Unreimbursed employee expense deductions eliminated (but self-employed still qualify for business deductions).
What’s Extended “Permanently” from 2017’s Tax Cuts and Jobs Act
- Lower individual tax rates (for income brackets 10%–37%).
- The standard deduction increase (it nearly doubled).
- Child Tax Credit expansion (now further increased).
We put permanent in quotes, because while it is considered permanent, perpetual is probably the better word. Tax laws and regulations are always subject to change.
When It Starts
Most changes apply to 2025 taxes (filed in 2026), with some retroactive to 2024 and others phased in by 2026.
📌 Takeaway: If you earn tips, work overtime, own a home in a high-tax state, or run a business, these changes could significantly affect your refund or tax bill.
Turbo Tax has a great page with information and updates on this here: https://turbotax.intuit.com/tax-reform/
