2025 Tax Bill: Changes and Benefits
Below is a quick summary of the main tax provisions in the 2025 "One Big Beautiful Bill Act" (H.R. 1), signed into law on July 4, 2025:
- TCJA Extension: Permanently extends 2017 Tax Cuts and Jobs Act provisions, including lower income tax rates (10%–37%), higher standard deductions, and estate tax exemptions.
- Return of 100% bonus depreciation. A great benefit for real estate investors qualifying as a REP (Real Estate Professional) or short term rental investor. Contact mw for more information on this!
- Standard Deduction: Sets at $15,750 (single), $31,500 (joint), $23,625 (head of household), with inflation adjustments; adds $6,000 for seniors (2025–2028, phases out above $75,000/$150,000 income).
- SALT Deduction: Raises cap to $40,000 (2025–2029, 1% annual increase), reverts to $10,000 in 2030, phases out above $500,000 income.
- No Tax on Tips/Overtime: Deducts up to $25,000 for tips and $12,500 (single)/$25,000 (joint) for overtime pay (2025–2028, phases out above $150,000/$300,000 income).
- Auto Loan Interest: Deducts up to $10,000 for interest on U.S.-assembled vehicle loans (2025–2028, phases out above $100,000/$200,000 income).
- Child Tax Credit: Increases to $2,200 (nonrefundable) and $1,400 (refundable) per child, permanent, with inflation adjustments; phaseout at $200,000/$400,000 income.
- Trump Accounts: Tax-advantaged savings for kids under 18, $5,000 annual limit, accessible post-18 for education, homes, etc.; includes $1,000 credit for kids born 2025–2028.
- Business Provisions: Extends 100% bonus depreciation, raises Section 199A deduction to 23%, allows factory expensing, limits sports teams’ intangible asset deductions to 50%.
- Other Deductions: Adds $150/$300 charitable deduction for non-itemizers (2025–2028), expands disaster loss deductions, eliminates clean energy credits (EV credits end September 30, 2025; home energy credits end December 31, 2025).
- Social Security: Deduction to offset taxes on benefits, reducing liability for average seniors.
