Curious how the One Big Beautiful Bill (the "Big Beautiful Bill Act") might reshape your taxes? Dive into TaxSlayer’s comprehensive breakdown to understand the key provisions and what they may mean for your filing strategy.

Here’s what you’ll find in their blog post (July 18, 2025):

  • A clear timeline: Most changes affect the 2026 tax year (so you’ll see them when filing in 2027), while some, like tip and overtime deductions, take effect right away.

  • Permanent changes include:

    • Tax brackets (10%–37%) anchored in place.

    • A higher standard deduction.

    • A $750,000 mortgage interest limit.

  • Enhanced credits and deductions starting in 2025:

    • Child Tax Credit raised to $2,200.

    • Adoption credit set at $17,280 (refundable up to $5,000).

    • Expanded casualty loss deductions.

    • Raised SALT deduction cap to $40,000, increasing 1% annually through 2029.

  • New temporary deductions (2025–2028):

    • Up to $25,000 for qualifying tip income.

    • Up to $12,500 for overtime pay.

    • Deduct interest on new U.S.-built car loans (up to $10,000).

    • Additional $6,000 senior deduction (for taxpayers 65+) — $12,000 for married couples.

  • Other notable updates:

    • Bonus depreciation increased to 100%.

    • Mortgage insurance premiums become deductible starting 2026.

    • Several clean energy credits (e.g., EV credits) are set to expire.

Why This Matters to You

  • Plan Ahead: Knowing what changes take effect immediately vs. later helps with filing strategy and timing of claims.

  • Maximize Benefits: Temporary deductions (like for tips or senior credits) present valuable opportunities—but only if used within the window.

  • Stay Informed: With clean energy incentives winding down and new limitations on deductions emerging, being proactive can protect your tax savings.