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What’s Next for Taxes? Here’s What Happened With The OBBB

what to expect for taxes 2025 - 13 consulting cpa in berks county pa

One Big Beautiful Bill Act (OBBBA, OBBB, or BBB)

Some amendments make the Tax Cuts and Jobs Act of 2017 (TCJA) provisions permanent or extended. If not specifically mentioned, the deduction rates are for single filers.

Individual Taxpayers

  • The tax brackets of 10%, 12%, 22%, 24%, 32%, 35%, and 37% remain permanent from the TCJA.
  • Increased standard deduction to: single or married filing separately – $15,750; head of household – $23,625; married filing jointly or surviving spouses – $31,500.
  • Up to $25,000 of tip income is deductible, and a maximum annual deduction of $12,500 on overtime, with a phaseout at $150,000 in MAGI (2025-2028).
  • Any personal use vehicle that undergoes final assembly in the United States has a maximum annual deduction of $10,000 in car loan interest.
  • 65 and older individuals get an additional deduction of $6,000 each, with a phaseout of $75,000 in MAGI.
  • Increases the state and local taxes (SALT) deduction to $40,000 from the original $10,000.
  • Permanently eliminates miscellaneous itemized deductions.
  • The lifetime estate and gift tax exemption has increased to $15 million per individual.
  • Itemized deductions for personal casualty losses resulting from state & federal declared disasters are in effect.
  • Mortgage interest deduction cap remains at $750,000 of acquisition debt.
  • Child Tax Credit increased from $2,000 to $2,200 per child, phase out thresholds are $400,000 for joint filers.
  • 529 plans get more flexible with up to $20,000 to pay for K-12 expenses (up from previous $10,000):
    • Also includes books, online learning materials, tutoring, standardized tests, college exams, etc.
  • Adoption Tax Credit is refundable up to $5,000.
  • Trump Child Savings Accounts are created with a contribution limit of $5,000 per tax year (2026-2028):
    • The government will make a one-time $1,000 contribution per child to a U.S. citizen.
  • The Alternative Minimum Tax (AMT) exemption amount is $88,100:
    • The AMT ensures higher-income taxpayers pay at least a minimum tax.

Get Expert Financial Advice from a CPA

Stay tuned as we continue to monitor legislative developments and their potential impact on your financial planning. Ready to get your business’s finances set up the right way? Schedule a call with 13 Consulting for expert advice.

Disclaimer: This content has been reviewed and approved by a licensed Certified Public Accountant. Please note, however, that tax guidance is never one-size-fits-all. Your individual circumstances, financial situation, and goals may require tailored advice. For recommendations specific to your needs, contact 13 Consulting LLC directly.