Big Changes Ahead: How the “Big Beautiful Bill” Affects You

 

The recently signed One Big Beautiful Bill Act (“Big Beautiful Bill”) introduces significant updates to federal tax law. As your trusted advisors at Moss & Yantis CPA in Mt. Pleasant, SC, we want to break down the changes that may affect your 2025 tax return and beyond in clear, plain language.

 

Key Tax Changes for Individuals

1. Permanent Higher Standard Deduction

• The bigger standard deduction from 2017 is now permanent. For 2025, the standard deduction amounts are:

  • Single/Married Filing Separately: $15,750

  • Head of Household: $23,625

  • Married Filing Jointly/Qualifying Surviving Spouse: $31,500

• This means more people may benefit from not itemizing deductions, simplifying tax filing.

2. No More Personal Exemptions

• Personal and dependent exemptions are permanently eliminated, with the exception of a special senior bonus outlined below.

3. Income Tax Rates Locked In

• The individual tax brackets from the 2017 law are now permanent:

  • 10%, 12%, 22%, 24%, 32%, 35%, 37%

• The lowest brackets (10% and 12%) will adjust with inflation starting in 2026.

4. State and Local Tax (SALT) Deduction Cap Raised

• The SALT deduction cap jumps from $10,000 to $40,000 through 2029—helpful if you pay high property or state income taxes.

• The cap will revert to $10,000 in 2030.

5. New and Expanded Deductions

• Tip Income Deduction: Deduct up to $25,000 of tip income each year (phases out at $150,000 for single/$300,000 for joint filers, 2025–2028).

• Overtime Income Deduction: Deduct up to $12,500 for single filers, $25,000 for joint filers (same phase-outs and years as above).

• Auto Loan Interest Deduction: Deduct up to $10,000/year in interest on auto loans for U.S.-assembled vehicles purchased after 2024 (limited to incomes under $100,000 single/$200,000 joint).

6. Extra Deduction for Seniors

• “Senior bonus” deduction: Additional $6,000 per filer ($12,000 for married couples) for those age 65+.

• Phases out for incomes over $75,000 (single) or $150,000 (joint) (valid 2025–2028).

7. Child Tax Credit and Child Savings Accounts

• Child Tax Credit is increased to $2,200 per child and will adjust for inflation starting in 2026.

• New children’s savings accounts (“Trump Accounts”) for kids under age 8 offer new long-term, tax-advantaged saving options (specifics unfolding).

8. Estate and Gift Tax Exemptions Increased

• Estate and gift tax exemption jumps to $15 million (single) or $30 million (married). This helps families with significant assets plan for the future.

When Do the Changes Apply?

What Should You Do Next?

• Review your 2025 income and expected deductions to see if itemizing still makes sense for you.

• Plan major purchases, such as homes or vehicles, with new deductions in mind.

• If you are a senior, verify whether you’ll qualify for the new extra deduction.

• Families with children should ask about the new savings opportunities and expanded credits.

• If you pay high state taxes, be sure to leverage the new higher SALT deduction cap if eligible.

Moss & Yantis CPAs are here to help you navigate these changes and maximize your benefits. If you have questions about how the Big Beautiful Bill affects you, please contact our office for a personalized review.

 

This summary reflects information as published by official sources and respected tax analysis organizations as of July 23, 2025. For complex or high-income situations, individualized advice is recommended for the most accurate planning.