As part of our commitment to keeping you informed with timely and actionable guidance, I wanted to share a few important highlights from the new tax and spending law, the One Big Beautiful Bill Act (OBBB) signed into law on July 4th.
Some of these changes are retroactive to January 1, 2025, while others will phase in over the next few years. This isn't a complete list of every provision, but it includes the ones most likely to affect your planning. We'll cover what's relevant to you during your fall planning meeting.
In the meantime, I'll be reaching out later this week to show you how the new tax law would have impacted your 2024 return as a side-by-side comparison. That will help us plan ahead and make the most of the upcoming changes for 2025 and beyond.
What's Changing for Everyone
Higher Standard Deduction (starting 2025)
- $15,750 (Single)
- $23,625 (Head of Household)
- $31,500 (Married Filing Jointly)
- Adjusted annually for inflation
For Retirees and Clients Age 65+
Senior Deduction (2025–2028)
- $6,000 per person age 65+
- $12,000 per couple
- Phases out above $75,000 (single) / $150,000 (joint)
HSA Rule
- If enrolled in Medicare Part A, you cannot contribute to an HSA
- You may still use existing HSA funds for qualified expenses
For Families and Working Households
Child Tax Credit (starting 2025)
- Increased to $2,200 per child
- $1,400 remains refundable
- Income phaseouts unchanged
Dependent Care FSA (starting 2026)
- Limit increases from $5,000 to $7,500
- Eligible for daycare, after-school care, and camps
Tip and Overtime Income Deductions (2025–2028)
- Deduct up to $25,000 in tips
- Deduct up to $12,500 (single) or $25,000 (joint) in overtime
- Phases out above $150,000 (single) / $300,000 (joint)
HSA Expansion (starting 2026)
- Bronze and catastrophic ACA plans qualify
- Direct Primary Care memberships eligible (up to $150/month individual, $300/month family)
Education and Family Savings
529 Plan Expansion (starting 2025)
- Covers more K–12 and career training expenses
Education Scholarship Credit (starting 2027)
- $5,000 or 10% of income, whichever is greater
- Applies to approved K–12 scholarship donations
Trump Savings Accounts (expected 2027)
- Up to $5,000/year per child born between Jan. 1, 2025 and Dec. 31, 2028
- Withdrawals allowed starting at age 18
- Contributions may come from families, nonprofits, or local governments
Broader Tax Code Updates
Tax Brackets Made Permanent (starting 2025)
- Current brackets (10%, 12%, 22%, etc.) remain in place
- Indexed annually to help reduce how much income is taxed at higher rates
SALT (State and Local Tax) Deduction Cap Increase (2025–2029)
- Increased from $10,000 to $40,000
- Indexed for inflation
- Begins phasing down at $500,000 income
- Reverts back to $10,000 in 2030 unless extended
Clean Energy Credits Ending Soon
| Credit | Ends After |
|---|---|
| Clean Vehicle Credit (EVs) | September 30, 2025 |
| Residential Clean Energy | December 31, 2025 |
We're Staying Current So You Don't Have To
We're Staying Current So You Don't Have To
We're keeping a close eye on all the tax law changes so we can deliver proactive, personalized advice for you and your family. If someone you know is confused about how this might impact their situation, I'd be happy to help.
Thank you, as always, for your trust and your referrals. They're the highest compliment we can receive.