It is tax time again, and if you feel like we blinked and 2025 disappeared, you are not alone. Now, as the year-end tax documents start trickling in, let’s shift gears and review a few of the biggest tax law changes from the One Big Beautiful Bill Act that apply to the most people.
1) The “Tax Cuts” That Did Not Sunset
A lot of folks expected major bracket changes after 2025. The new law extends many of the expiring TCJA provisions affecting individuals & families, including the reduced individual income tax rates. Of course, “permanent” is a fluid term in government.
2) The Standard Deduction & Child Tax Credit Continue at the Higher Levels
For the average household, this is still the backbone of the return. The law extends the increased standard deduction and expanded child tax credit that many families have grown used to seeing.
3) A Bigger SALT Deduction Cap (For Now)
If you itemize and pay meaningful property taxes & state income taxes, this one matters. The SALT (State And Local Tax) cap becomes $40,000 for most taxpayers for tax year 2025, increases annually for tax years 2026 through 2029, then permanently resets to $10,000 for most taxpayers beginning in 2030.
4) Seniors Get a Temporary Additional Deduction
Despite the headlines you may have seen, the bill does not eliminate tax on Social Security income. Instead, it creates a temporary additional deduction for seniors. That will be helpful for many retirees, especially those managing required minimum distributions and investment income.
5) New: Auto Loan Interest Can Be Deductible
This is a big one because it affects everyday decisions. Under the new rules, qualified passenger vehicle loan interest is temporarily deductible for 2025 through 2028, subject to several guardrails. The loan generally must be taken out after December 31, 2024, secured by a first lien, and used to buy an applicable passenger vehicle for personal use, with final assembly in the United States. The deduction is capped at $10,000 per year and phases out above certain income levels.
As always, these points just touch the surface. If you want to avoid surprises, the best time to talk is before you file, not after a notice shows up.
What should you do now? Don’t wait until April to discover these changes. A quick pre-filing review of income sources, withholding/estimated payments, and itemized deductions can help you file confidently and avoid underpayment issues.
If you’d like a second set of eyes on how these changes affect your household or business, schedule a quick consultation with the tax & financial professionals at Coonrod Financial Group.
