The One Big, Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, and with it comes many new tax provisions that may directly affect you. There are many tax provisions contained in OBBBA beyond the ones we have highlighted here.
Extension of expiring tax provisions
OBBA made permanent most of the provision of the 2017 tax cuts (2017 TCJA). It also added some new ones:
State and local tax deductions
| Increase the SALT deduction | From $10,000 to $40,000 for 2025. Increases by 1% through the 2029 tax year. Reverts to $10,000 after 2029.
(for AGI over $500k phases down to $10,000 max) |
*** Key Planning Point – If your AGI is $500,000 or less, you can deduct up to $40,000 on your federal return any state and local taxes you pay, so you may want to consider paying state taxes before 12/31/25 (real estate, personal property, income tax payments).
| Higher standard deductions | Single $15,750
Head of Household $23,625 Married Filing Joint $31,500 |
| $750,000 mortgage interest limitation | Includes mortgage insurance premiums |
| Increase in Child Tax Credit | $2,200 for 2025 and provides for inflation adjustments thereafter |
| Increase unified estate and gift tax exclusion beginning in 2026 | $15 million per taxpayer and adjusts for inflation thereafter |
Charitable contribution deductions
| Allows non-itemizers to claim charitable deductions | $1,000 ($2,000 for Married Filing Joint) |
| Imposes a floor for individuals who itemize | Must exceed 0.5% of income (AGI) (effective for 2026, NOT 2025) |
Brand new deductions
| No tax on tips (2025-2028) | Deduction of up to $25,000 for cash tips reported on W-2 or 1099. Phases out for AGI above $150,000 (or $300,000 for Married Filing Joint) |
| No tax on overtime (2025) | Deduction of overtime pay of up to $12,500 ($25,000 Married Filing Joint). Phases out for AGI above $150,000 ($300,000 Married Filing Joint) |
| No tax on qualified car loan interest on loans incurred AFTER 2024 (2025-2028) | Deduction of up to $10,000 for qualified passenger vehicle interest paid during the 2025-2028 tax years on loans incurred after 2024. Phases out for taxpayers with AGI above $100,000 ($200,000 Married Filing Joint) |
Each of these provisions contains multiple limitations that we should discuss if any of these potentially apply to you.
Energy credits going away
OBBBA repeals many energy credits, including all three clean vehicle credits for vehicles acquired after September 30, 2025. Additionally, both of the energy credits available to homeowners who make certain energy efficient improvements or install solar property, home batteries, and heat pumps, among other items are no longer available after December 31, 2025.
1099 -NEC and 1099-MISC thresholds increased
OBBBA increases other information reporting thresholds from $600 to $2,000 (for payments made in 2026 and thereafter) and adjusts the threshold for inflation after 2026.