What to expect with the new tax bill

You may have heard about the new tax U.S. tax law that is now in effect. The One Big Beautiful Bill ACT (OBBA) was signed into law on July 4, 2025, and includes sweeping changes to individual and business taxes. Anxious to know how you’re affected? We’ve highlighted some of the major changes below:

2017 Tax Cuts and Jobs ACT (TCJA) Changes Are Now Permanent 

The individual and corporate tax rates established by TCJA are now permanent. This means there’s no need to rush income acceleration or conversions such as Roth conversions or capital gains. This also adds predictability to estimated tax payments.

State and Local Tax (SALT) Deduction Cap Raised to $40k

The SALT deduction cap is temporarily lifted to $40K for taxpayers earning under $500K and will revert back to $10K after five years. If you are in a high-income tax state or pay significant amounts in property taxes, consider planning for itemization vs the standard deduction.

Standard Deduction & Senior Bonus

The larger standard deduction is now permanent, and taxpayers aged 65+ qualify for a temporary $6K extra deduction (phasing out above income thresholds). Seniors may benefit more from default deductions.

Child Tax Credits

The Child Tax Credit increases to $2,200 per child (indexed for inflation), and parents of children born 2025 through 2028 get a $1,000 seeded investment account with $5K/year contribution limits. Be sure to claim all eligible dependents and track qualified withdrawals.

Deduct Overtime, Tips, and U.S. Car Loan Interest

Temporary deductions (from 2026 through 2028) will allow up to $25K for tipped/overtime income, and up to $10K/year in interest on loans for U.S.-assembled vehicles. Phase-outs for these deductions apply by income. Employees in hospitality or service sectors should track cash tips diligently. Buyers of qualifying domestic autos should align purchase timing with loan interest deduction eligibility.

Capital Expense Deductions & Credits for Businesses

Businesses regain 100 % bonus depreciation, increased Section 179 limits, enhanced R&D tax credits, plus new bonus credits for semiconductor & manufacturing investment. Plan ahead for capital expenditures to consider needs and align purchase timing.

Plan for Phase-Out of Green Energy Credits

Many Inflation Reduction Act clean energy credits are being phased out. This includes EV credits ending by fall 2025, and solar/wind credits expiring in 2026 through 2027. Ensure qualified purchases are placed-in-service before these credits expire or you are factoring in timeline and tax credit risk when completing due diligence on new deals.

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Planning Ahead

OBBA opens up both additional compliance factors to consider, and planning opportunities for your tax situation. Reach out to schedule a free consultation with our team to see how you can take advantage of these changes and experience how we serve through our Financial Stewardship as a Service™ program.