The One Big Beautiful Bill that passed includes permanently extending tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to ...
Historic Tax Relief for Workers: 15% tax cut for Americans earning between $30,000 and $80,000 per year. No Taxes on Overtime or Tips: Saves overtime and tipped workers nearly $2,000 annually. Historic Tax Breaks for Seniors: Introduces unprecedented financial relief for seniors.
The average taxpayer would see a 22 percent tax hike if the Trump tax cuts expire. A family of four making $80,610, the median income in the United States, would see a $1,695 tax increase if the Trump tax cuts expire. This is worth about 9 weeks of groceries to a typical family of four across the country.
Tax changes for 2025, largely driven by the "One Big Beautiful Bill" (OBBBA) Act, introduce significant deductions for seniors, tips, overtime, and auto loan interest, expand the Child Tax Credit, and raise the SALT deduction cap to $40,000, while making several 2017 Tax Cuts and Jobs Act provisions permanent, including the seven tax brackets. Key changes include a $2,200 Child Tax Credit, a $6,000 senior deduction, deductions for qualified tips and overtime, and a permanent standard deduction increase.
Yes, many individual provisions of the Trump-era Tax Cuts and Jobs Act (TCJA) from 2017 are set to expire at the end of 2025, reverting tax law to pre-2017 levels unless Congress acts, with key changes including the standard deduction, SALT deduction cap, and estate tax rules set to change, although legislation like the "One Big Beautiful Bill Act" (OBBBA) has since extended some of these cuts into the future, changing the original expiration cliff.
Trump Tax Plan Changes: Standard Deduction
The 2017 Trump tax law (TCJA) nearly doubled the standard deduction for all filers, and OBBB bumped them up. If you're a single filer or if you're married filing separately, your standard deduction for 2025 rose to $15,750 under OBBBA.
The 2025 tax legislation signed into law by President Trump, commonly referred to as the One Big Beautiful Bill Act, largely preserves the existing capital gains tax framework. Long-term capital gains rates remain set at 0%, 15% and 20%, with no changes to the underlying brackets.
No Tax on Overtime is a provision that was included in a larger tax reform bill that passed in July 2025. It allows certain workers to deduct up to $12,500 in qualified overtime compensation from their taxable income on their federal income tax return. Joint filers can deduct up to $25,000.
At the end of 2025, the individual portions of the Tax Cuts and Jobs Act expire all at once. Without congressional action, 62 percent of filers could soon face a tax increase relative to current policy in 2026. At the same time, the price tag for extending the 2017 Trump tax cuts is in the trillions.
3. Retirement plan contribution caps rise. The IRS sets annual limits on the amount you can put into an individual retirement account (IRA) or workplace retirement plan, with multiple tiers. For IRAs, the standard contribution cap for the 2026 tax year is $7,500, up from $7,000 in 2025.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
Under the law, there were numerous changes to the individual income tax, including changing the income level of individual tax brackets, lowering tax rates, and increasing the standard deductions and family tax credits while itemized deductions are reduced and the personal exemptions are eliminated.
Donald Trump, previously the president of the United States from 2017 to 2021, campaigned in 2024 on the promise of an economic nationalist system characterized by protective tariffs, lower taxation, and reduced regulations, where income tax would be largely or completely replaced by tariffs on other countries to ...
To avoid the 22% tax bracket (or any higher bracket), focus on reducing your taxable income through strategies like maxing out 401(k)s and HSAs, deferring bonuses, tax-loss harvesting, smart charitable giving, and strategic asset location, understanding that higher rates only apply to income within that bracket, not your entire income.
Unemployment compensation generally is taxable. Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.
President-elect Donald Trump campaigned on lowering the US corporate income tax rate to 15 percent. He made the same request in 2017 when Republicans passed their tax cuts, but Congress only cut the federal rate to 21 percent—down from the worldwide high of 35 percent.
On May 28, 2021, the White House and Treasury released the Fiscal Year 2022 Federal Budget and the Treasury Green Book, or "Green Book", which includes new details regarding the Biden administration's proposed 2021 tax reform -- including a retroactive proposed capital gains tax increase to 37% to the extent household ...
The new senior tax deduction of up to $6,000 for single filers and $12,000 for joint filers, was created to help cover taxes on Social Security benefits. Taking the new senior deduction helps to reduce your taxable income, which can mean less tax or potentially an even bigger tax refund when you file your return.