Blog
Big Beautiful Bill- What's in it for Who?
Erin OBrien
Jul 07 2025 02:57
After months of writing and negotiating, the new, sweeping tax reform legislation dubbed "One Big Beautiful Bill" was signed into law on July 4, 2025. It contains 1,000 pages of changes to the tax code. Let's look at the highlights here; see future posts in the coming days for more details.
Most interesting to residents of high property and income tax states like New Jersey and New York, the "SALT" cap was raised from $10,000 to $40,000. Under previous law, taxpayers itemizing deductions could only deduct up to a total of $10,000 in property tax plus state and local income taxes. For incomes over $500,000, that amount becomes limited. There are lots of implications here and dissecting it will be the focus of my next post.
Despite what your email from Social Security may have said, Social Security income is still taxed. But there is now a bonus tax deduction for seniors age 65 and over, of $6,000 per person; $12,000 per couple. That can effectively make your Social Security not taxable, depending on other factors. There is a relatively low income limit on that deduction though, that phases it out beginning at $75,000 for singles and $150,000 for couples.
The "no tax on overtime and tips" proclamations are also not exactly what they sound like. For overtime, there is a new deduction up to $12,500 per person on federal income tax and $25,000 for tips. Social Security, Medicare, and state/local taxes all still apply, and there is again an income phaseout.
Taxpayers who take the standard deduction can still get a deduction for charitable donations up to $1,000 for single filers and $2,000 if married filing jointly.
There is a new auto loan interest deduction, for vehicles assembled in the US for loans taken out after 12/31/24. It is limited to $10,000 (which really would take a very large loan to reach... like $150k large) and has an income limit of $100k single and $200k married filing jointly.
The child tax credit was increased to $2,200 per child from $2,000.
The law created a new type of trust account for children, that will be invested in a stock index (not controlled or chosen by the child or parent but the government). Taxes are deferred until the funds are withdrawn. You can contribute up to $5k per year, and children born in 2025 thru 2028 will have an account established for them with a $1,000 deposit from the government for seed money. I have a lot of questions about how this will work and am anxious to learn the details, which I'll share.
There are also massive changes and many questions around student loan repayments, loan caps, deferments, and forgiveness. Details forthcoming on that as well.
In the meantime, if anyone's looking for me, I'll be buried in tax code....
Stay tuned!
