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What the One Big Beautiful Bill Act Means for Individual Taxpayers

August 5, 2025
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President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, delivering sweeping updates to the U.S. tax code. For individual taxpayers, the OBBBA brings a mix of permanence, expansion, and new opportunities—especially as many provisions from the Tax Cuts and Jobs Act (TCJA) were set to expire at the end of the year.

Here’s a breakdown of the top nine changes that could impact you and your family’s financial planning going forward:

1. 📊 TCJA Tax Rates Made Permanent
The OBBBA cements the existing seven income tax brackets—10%, 12%, 22%, 24%, 32%, 35%, and 37%—into permanent law, with annual inflation adjustments beginning in 2026.

Capital gains and qualified dividends will continue to be taxed favorably, ranging from 0% to 20%, depending on your income. Special capital gain rates for real estate and collectibles also remain unchanged.

2. 💵 Higher Standard Deductions, Locked In
The enhanced standard deduction amounts introduced by the TCJA are now permanent:

    • $15,750 for single filers
    • $23,625 for heads of household
    • $31,500 for married couples filing jointly
    • Additional deductions remain in place for taxpayers 65 or older or blind—$2,000 for single filers and $1,600 per spouse for joint filers.

3. 👵 New Senior Deduction
From 2025 through 2028, individuals aged 65 and older can claim a new deduction of up to $6,000, regardless of whether they itemize. Couples where both spouses qualify may claim up to $12,000 combined, with income-based phaseouts beginning at:

  • $75,000 for single filers
  • $150,000 for joint filers

4. 🏠 SALT Deduction Expanded (Temporarily)
The State and Local Tax (SALT) deduction cap increases to $40,000 through 2029 ($20,000 for married filing separately), with inflation adjustments and income-based phaseouts starting at $500,000 MAGI.

⚠️ Note: The deduction reverts to $10,000 in 2030 unless further legislative action is taken.

5. 👶 Enhanced Child Tax Credit
The Child Tax Credit increases to $2,200 per qualifying child under 17 starting in 2025. The refundable portion is $1,700 for 2025, both adjusted annually for inflation after 2026.

Important: A Social Security Number is now required for both the child and the taxpayer to claim the credit.

6. 👨‍👩‍👦 $500 Credit for Other Dependents
This credit, originally scheduled to sunset in 2025, is now permanent. It applies to qualifying dependents who aren’t children under 17—such as older children or elderly parents.

7. 🧾 Expanded QBI Deduction
The 20% Qualified Business Income (QBI) deduction is now permanent. Starting in 2026, income thresholds for phaseouts rise to:

  • $75,000 for individuals
  • $150,000 for married couples filing jointly

A minimum QBI deduction of $400 is introduced for taxpayers with at least $1,000 in income from a materially participated trade or business—even if they exceed the income thresholds.

8. 💼 Itemized Deduction Limits Return (for High Earners)
While most taxpayers will continue to enjoy unlimited itemized deductions, high earners in the top 37% tax bracket will see a partial cap return in 2026:

  • Deductions reduced by 2/37 of allowable itemized deductions or
  • The amount of income above the 37% tax bracket threshold (whichever is less)

9. 💰 Gift & Estate Tax Exemption Increases
The unified federal gift and estate tax exemption increases to $15 million per person in 2026, or $30 million for married couples, and will be indexed for inflation going forward.

📘 Additional OBBBA Provisions You Should Know
While these are the most relevant updates for individual taxpayers, the OBBBA also made the following permanent:

  • Higher AMT (Alternative Minimum Tax) exemptions
  • More flexible rules on moving expenses, mortgage interest, and casualty losses
  • Expanded child and dependent care credits, adoption credits, and 529 savings options
  • New deductions for interest on domestically assembled vehicle loans
  • Charitable deduction opportunities for both itemizers and non-itemizers
  • Introduction of “Trump accounts” for U.S.-born children between 2025–2029

⚠️ Green tax breaks, such as consumer electric vehicle and home energy efficiency credits, are set to expire by the end of 2025.

🧠 Ready to Plan Ahead?
With these tax updates now in place, 2025 is the perfect year to revisit your tax and financial strategy. Whether you’re planning your estate, optimizing deductions, or making large financial decisions, the Bland & Associates team is here to help.

📞 Let’s Talk: Contact us today  to schedule a personalized consultation.

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