The One Big Beautiful Bill and You
Just before the July 4th holiday, Congress passed a domestic policy bill that extended the 2017 tax cuts that were set to expire this year while making some of the 2017 rules permanent. The bill also created several new tax laws for individuals while addressing other tax issues for businesses.
Some of the changes will start this year, while others will kick in in 2026. Like previous tax laws, some of the new rules are scheduled to expire, while others are permanent.
Here’s a quick summary of five individual tax law changes that are expected to impact most tax filers in 2025:
Standard Deduction
It also increased the standard deduction to $15,750 for single filers and $31,500 for those filing jointly for 2025. Both are slightly rising from the current rate. Note: The standard deduction will adjust for inflation starting next year.
State and Local Tax Deduction (SALT)
The SALT will increase to $40,000 in 2025 and will increase 1 percent annually until 2030. However, in 2030, it will revert to $10,000. Note: SALT has a $500,000 threshold for single and married filers.
The “Bonus” Deduction
The new “bonus” deduction for older Americans has received much attention since the One Big Beautiful Bill Act became law on July 4. Here’s what’s changing for seniors with the new bill. Starting in 2025, the bill provides a $6,000 bonus deduction for filers 65 and up in addition to the standard deduction available to all taxpayers. The new rule will also affect unmarried/non-surviving spouses. The deduction begins to phase out for individuals with incomes starting at $75,000, or joint filers with an income of $150,000. It phases out completely for individuals earning more than $175,000 and couples earning $250,000. Note: The bonus deduction ends in 2028.
Estate and Gift Tax Exemption
The bill increases the estate and gift tax exemption starting in 2026. This year, it is capped at $13.99 million for single filers and $27.98 million for married filing jointly. In 2026, it will increase to $15 million for single filers and $30 million for married filing jointly. Note: The exemption will increase with inflation.
Charitable Contribution
Charitable contributions of $1,000 for individual filers and $2,000 for married couples filing jointly are now deductible, even if you don’t itemize your deductions.