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The One Big Beautiful Bill Act: Key 2025 Tax Changes You Need to Know

Retirement

The One Big Beautiful Bill Act, signed into law on July 4, 2025, brings sweeping changes to U.S. tax policy. Here’s a breakdown of the most impactful highlights:

Individual Taxpayer Benefits

  • Permanent 2017 Tax Cuts: The lower tax brackets from the 2017 Tax Cuts and Jobs Act (TCJA) are now permanent.
  • Higher Standard Deduction: Increased to $15,750 (single), $23,625 (head of household), and $31,500 (married filing jointly), adjusted for inflation.
  • Senior Bonus Deduction: Taxpayers aged 65+ get a temporary $6,000 deduction (2025–2028), phased out for higher incomes.
  • Child Tax Credit Boost: Raised to $2,200 per child, with inflation indexing. The refundable portion remains at $1,400.
  • SALT Deduction Cap Raised: It’s temporarily increased to $40,000 through 2029 and will revert to $10,000 in 2030. Additionally, it phases down for incomes over $500,000.

New Deductions for Workers

  • No Tax on Tips: Up to $25,000 in tip income is deductible through 2028. Phases out for incomes over $150,000 ($300,000 joint).
  • Overtime Deduction: Workers can deduct up to $12,500 in overtime pay through 2028.
  • Car Loan Interest Deduction: Up to $10,000 deductible for American-made vehicle purchases (2025–2028), with income limits.

Business & Investment Incentives

  • 100% Bonus Depreciation: Businesses can fully expense capital investments immediately. Which is now permanent.
  • R&D Expensing Restored: Domestic research expenses can be deducted immediately, retroactive for small businesses.
  • Pass-Through Deduction Made Permanent: The 20% deduction for qualified business income (QBI) is now permanent.
  • QSBS Expansion: Qualified Small Business Stock exclusion increased to $15 million, with partial exclusions for 3- and 4-year holdings.

Energy & Green Incentives Rolled Back

  • Most clean energy tax credits (EVs, solar, home efficiency) are eliminated or scaled back to offset the bill’s cost.

Impact & Cost

  • Estimated to cost $3.7 trillion over 10 years due to extended tax cuts.
  • Cuts to programs like Medicare and SNAP offset spending, disproportionately affecting lower-income households.

This bill reshapes the tax landscape for families, workers, and businesses. Want help calculating how these changes might affect your taxes or investment strategy? Contact our team at Heisten Financial, and we’ll help you determine your next steps.

Chris graduated from the University of Maine, where he played hockey on a scholarship, and retired from professional hockey in 2007. In the community, he remains engaged, serving as a youth hockey coach. Chris holds the CERTIFIED FINANCIAL PLANNER™. Outside the office, he enjoys trying new food and wine, reading, traveling, playing golf and hockey, fat tire biking, and donating to local charities. His passions include being a husband and dad, lake life with the family, watching his son and daughter play sports, and spending time with his wife. To learn more about Chris, connect with him on LinkedIn.

Heisten Financial, LLC is a registered investment advisor with the SEC. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed.