Key Tax Changes for 2025 and Beyond
Executive Summary
The One Big Beautiful Bill Act has been signed into law, extending many provisions from the 2017 Tax Cuts and Jobs Act while introducing new tax benefits. This whitepaper outlines the key changes that may impact your personal and business taxes.
Individual Tax Changes
Tax Rates and Standard Deduction
- Tax rates from 2017 are now permanent – no increases scheduled
- Higher standard deduction continues:
- Single filers: $15,750
- Married filing jointly: $31,500
- Head of household: $23,625
State and Local Tax (SALT) Deduction
- SALT cap increases temporarily from $10,000 to $40,000 (2025-2029)
- Phases out for high earners (income over $500,000)
- Returns to $10,000 in 2030
With the new OBBB/Trump tax bill, the SALT cap is increased to $40,000 (up from $10K), finally offering real relief for high-income earners — without killing the PTET deduction!
Let’s say your client made $450K in 2024, paid $40K in NJ PTET taxes in April 2025 — and then opts into PTET for their 2025 income. If they prepay another $50K in PTET before year-end 2025, they can potentially deduct the full $90K of SALT-related AND PTET taxes on their overall 2025 federal returns. The best part? Congress did not restrict the use of PTET in this bill — so you still get the PTET workaround AND the higher SALT cap.
2025 could be a golden window for SALT/PTET planning — especially for those hovering just under the MAGI threshold.
New Tax-Free Benefits
Tips and Overtime
- No tax on tips up to $25,000 (2025-2028)
- No tax on overtime up to $12,500 ($25,000 for married couples)
- Both benefits phase out for higher earners
Senior Deduction
- $6,000 deduction for taxpayers 65 and older (2025-2028)
- Phases out for higher earners
Child and Family Benefits
- Child tax credit increases to $2,200 per child
- Dependent care assistance increases to $7,500 (from $5,000)
- Child and dependent care credit increases to 50% of expenses
Other Notable Changes
- Car loan interest deduction for US-assembled vehicles (2025-2028)
- Charitable deduction for non-itemizers up to $1,000 ($2,000 for married couples)
- “Trump accounts” – new tax-advantaged savings for minors
Business Tax Changes
Immediate Benefits
- 100% bonus depreciation returns permanently
- Research and development expenses can be deducted immediately (domestic only) and you can amend prior years if you capitalized and amortized
- Section 179 expensing increases to $2.5 million
Credits and Incentives
- Advanced manufacturing credit increases from 25% to 35%
- Employer-provided child care credit increases significantly
- Qualified small business stock exclusion increases (75% for 4+ years, 100% for 5+ years)
Clean Energy Changes
- Most clean energy tax credits eliminated by 2025-2028
- Significant shift away from green energy incentives
What This Means for You
For Individuals
✓ Lower taxes for most taxpayers through extended rates and higher deductions
✓ Significant SALT relief for high-tax state residents (temporary)
✓ New opportunities to reduce taxes on tips, overtime, and car purchases
✓ Enhanced child-related benefits for families
For Businesses
✓ Immediate tax savings through 100% bonus depreciation and R&D deductions
✓ Increased investment incentives through enhanced credits
✓ Permanent benefits for small business expensing
Planning Considerations
- Act quickly on bonus depreciation opportunities
- Review tip and overtime structures for potential tax savings
- Consider timing of major purchases and investments
- Plan for 2030 when SALT cap reverts to $10,000
Next Steps
Given the complexity and timing of these changes, we recommend:
- Schedule a consultation to review how these changes impact your specific situation
- Update your tax planning strategy for 2025 and beyond
- Consider accelerating certain deductions and investments
- Review your business structure for optimal tax efficiency
Disclaimer
This whitepaper provides a general overview of the One Big Beautiful Bill Act. Tax laws are complex and individual circumstances vary. Please consult with your tax professional for advice specific to your situation.
For more detailed information or to schedule a consultation, please contact our office 321-379-1040.
Moshe Mindick, CPA
Managing Partner of Bright Hill Advisors, LLC
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