Tax Highlights from the Big Beautiful Bill

Written By Chad Huebsch

Tax Highlights from the Big Beautiful Bill that was signed on July 4th, 2025

✅ 2017 Tax Cuts Made Permanent

  • The 2017 TCJA tax brackets (10–37%) are now permanent and indexed for inflation. No change from last year but rates were scheduled to increase 1/1/26 otherwise.

  • The standard deduction remains doubled and is now permanent, with an immediate bump: for 2025, it's $15,750 (single), $31,500 (joint) instead of $15,000/$30,000 and will be adjusted annually.

💸 SALT Deduction Cap Increase

  • State and local tax (SALT) deduction cap raises from $10,000 to $40,000 (phases out for incomes over $500K), for 2025–2029; reverts to $10K in 2030. This means you can deduct $30,000 more than last year as an itemized deduction.

👵 Deductions for Seniors, Tips & Overtime (2025–2028)

  • Seniors 65+: extra $6,000 deduction, phased out above $75K ($150K joint).

  • Tips: up to $25,000 deductible for incomes ≤ $150K/$300K joint.

  • Overtime pay: up to $12,500 deductible ($25,000 joint), same income thresholds.

🚗 Auto Loan Interest Deduction (2025–2028)

  • Deduct interest on new U.S.-assembled car loans up to $10,000/year, phases out above $100K (single) / $200K (joint).

👶 Child Tax Credit & Charitable Deduction

  • Child Tax Credit raised to $2,200 per child in 2025, inflation-adjusted thereafter.

  • Creates an above-the-line charitable deduction: $1K single / $2K joint for non-itemizers, starting 2026. So even if you don’t itemize you can still deduct some of your donations.

🏠 Housing & Estate Provisions

  • Mortgage interest deduction limit stays at $750K permanently. Down from $1M pre-2018.

  • Estate and gift tax exclusions doubled and inflation-indexed: up to $15M single / $30M joint. Meaning no estate tax on your death if your assets are below these amounts.

⚠️ Repeals & Limitations

  • Personal exemptions permanently repealed; AMT exemptions remain. No change from last year.

  • New limit on itemized deductions for high earners (cap itemized deduction benefits at ~35% vs. 37%). If you give a lot to charity, pay high state taxes or pay a lot of mortgage interest this could affect you.

🧾 Business Items

  • 100% bonus depreciation is back for assets purchased AFTER January 19th, 2025

  • 20% QBI deduction for pass-through businesses remains permanent. This is huge for business and real estate owners. Higher (more beneficial) phaseouts starting in 2026 $75k (single) and $150K (joint) instead of $50k (single) and $100k (joint)

  • QSBS (Qualified Small Business Stock) rules improved: asset cap $75M; gain exclusion up to $15M. Partial exclusion in years 3 and 4 instead of having to wait 5 years.

  • Research & Development is allowed to be immediately expensed instead of capitalizing over 5 years. Some small business will be able to amend older years otherwise full expensing in 2025 is allowed.

⛔ What’s Gone: Energy & Tax Credits Rollbacks

  • Phases out many clean energy credits (EV, renewables), accelerating climate credit transitions

Chad Huebsch
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