A New Era of Taxes: Key Takeaways from the 2025 One Big Beautiful Bill

Brianne King

July 10, 2025

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On July 4, 2025, President Trump signed into law new tax legislation titled the One Big Beautiful Bill Act. This is the first tax law change that our country has seen since the President’s first term, in which he passed the Tax Cuts and Jobs Act in 2017 (TCJA).

A key provision of the new law is the reduced tax rates and brackets from the 2017 TCJA, which were set to expire on January 1, 2026, have been made permanent.

It is important to note that many of the changes in the new legislation will begin in 2025, such as the much-debated State and Local Income Tax Deduction which was capped at $10,000 but has been increased to $40,000. Below is a summary of key changes in the One Big Beautiful Bill Act.

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Brianne King
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Brianne King
CFP®

Brianne spearheads the development and oversight of Fragasso’s comprehensive wealth planning strategy. She manages the wealth planning analyst team and is responsible for the integration of sophisticated planning solutions for our high-net-worth clientele. Brianne consults on complex client situations, often partnering with our wealth advisors. As a member of the executive leadership team, Brianne collaborates […]

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Key Individual Tax Changes from Trump’s One Big Beautiful Bill

Current law vs. final legislation: The table shows changes to current tax policy per Congress’s 2025 proposed tax and spending measure.1

Standard deduction – Current Law

$15,000 single; $30,000 married filing jointly for 2025

Standard deduction – Final legislation

$15,750 single; $31,500 married filing jointly for 2025

‘Bonus’ deduction for older adults

– Current Law

$1,600 for age 65 and older for 2025; $2,000 unmarried / not surviving spouse for 2025

‘Bonus’ deduction for older adults

– Final legislation

$7,600 for age 65 and older; $8,000 for unmarried / not surviving spouse; both from 2025 through 2028

State and local tax deduction (SALT)

– Current Law

$10,000 limit through 2025

State and local tax deduction (SALT)

– Final legislation

$40,000 limit for 2025; increases by 1% through 2029; reverts to $10,000 in 2030

Child tax credit – Current Law

Max credit of $2,000 per child through 2025; refundable portion $1,700 for 2025

Child tax credit – Final legislation

Max credit of $2,200 per child; refundable portion $1,700 for 2025

Estate and gift tax exemption – Current Law

$13.99 million single; $27.98 million married filing jointly for 2025

Estate and gift tax exemption

– Final legislation

$15 million single; $30 million married filing jointly for 2026

Tax on tips – Current Law

N/A

Tax on tips – Final legislation

Deduct up to $25,000 per year from 2025 through 2028

Overtime Pay – Current Law

N/A

Overtime Pay – Final legislation

Deduct up to $12,500 per taxpayer from 2025 through 2028

Auto loan interest – Current Law

N/A

Auto loan interest – Final legislation

Deduct up to $10,000 of annual interest on new loans from 2025 through 2028

Child credit – Current Law

N/A

Child credit – Final legislation

One-time $1,000 credit to account per child born between 2025 through 2028

Charitable deduction for non-itemizers – Current Law

N/A after 2021

Charitable deduction for non-itemizers – Final legislation

$1,000 single; $2,000 married filing jointly; permanent after 2025

With any tax legislation change, it’s important to understand how the new law may impact your tax strategy and financial plan. While working in conjunction with your tax professional, your wealth advisor at Fragasso is available to answer any questions you may have and to help you navigate these changes.

Source:
1. https://www.cnbc.com/2025/07/03/trump-big-beautiful-bill-tax-changes.html

Your Top Questions About the 2025 One Big Beautiful Bill Tax Changes

What is the One Big Beautiful Bill Act and when was it signed into law?

The One Big Beautiful Bill Act is new tax legislation signed into law by President Trump on July 4, 2025. It marks the first major tax law change since the Tax Cuts and Jobs Act of 2017 and includes updates to deductions, credits, and tax brackets.

How did the State and Local Tax (SALT) deduction change under the new law?

The SALT deduction, which was previously capped at $10,000, has been increased to $40,000 for 2025. This limit will continue to increase by 1% annually through 2029 before reverting to $10,000 in 2030.

What are some new deductions introduced by the One Big Beautiful Bill Act?

New deductions include up to $10,000 in auto loan interest, up to $12,500 for overtime pay, and up to $25,000 in tips per year from 2025 through 2028. These aim to provide additional tax relief to working individuals and families.1

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