2025 Federal Tax Law Changes

Overview

The One Big Beautiful Bill Act (OBBB) makes most Tax Cuts and Jobs Act (TCJA) provisions permanent starting in 2025. It also introduces several temporary deductions available through 2028.

For full details, check out this link:
Full 2025 Tax Law Update Information

Key Highlights

• Tax Rates: TCJA tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) are now permanent.

• Standard Deduction: Increased to $15,750 (Single) and $31,500 (Married Filing Jointly).

• Personal Exemptions: Permanently eliminated.

• New Deductions (2025–2028):

  • No Tax on Tips – up to $25,000 per return.

  • No Tax on Overtime – up to $12,500 per individual.

  • Car Loan Interest – up to $10,000 for new U.S.-assembled vehicles.

  • Enhanced Senior Deduction – additional $6,000 for taxpayers age 65+.

• SALT Cap: Raised to $40,000 (2025), gradually increasing until 2029, then reverts to $10,000.

• Child Tax Credit: Permanently increased to $2,200 per child.

• Bonus Depreciation: Set permanently at 100%.

Additional Updates

• New Schedule 1-A for reporting additional deductions.

• Form 1099-DA introduced for digital asset reporting.

• Form 1040 redesigned with ~30 updates.

Reminder

Taxpayers are advised to review their W-4 forms for proper withholding since IRS withholding tables have not been updated to reflect these changes.

For full details, check out this link:
Full 2025 Tax Law Update Information