At JPC Tax & Advisory, we know that legislative updates can feel overwhelming for both individual taxpayers and small-to-mid sized business owners. The One Big Beautiful Bill Act (OBBBA) introduces important tax law changes that affect planning for the 2025 and 2026 tax years. Below, we explain what these changes mean — organized by personal and business impacts — so you can stay informed and ahead of the curve.
Impacts on Personal Tax Clients
2025 Changes:
Permanent Tax Brackets & Standard Deduction
Under OBBBA, the individual tax rate structure established by the 2017 Tax Cuts and Jobs Act (TCJA) is now permanent and will continue through 2025 and beyond. Standard deduction amounts have also been increased for 2025.
2025 Federal Income Tax Brackets (Taxable Income Ranges)
For the 2025 tax year (returns normally filed in 2026)
| Tax Rate | Single Filers | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $11,925 | $0 – $17,000 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 | $11,925 – $48,475 | $17,000 – $64,850 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 | $48,475 – $103,350 | $64,850 – $103,350 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 | $103,350 – $197,300 | $103,350 – $197,300 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 | $197,300 – $250,525 | $197,300 – $250,500 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 | $250,500 – $375,800 | $243,701 – $626,350 |
| 37% | $626,350+ | $751,600+ | $375,800+ | $626,350+ |
2025 Standard Deduction Amounts
| Filing Status | 2025 Standard Deduction |
|---|---|
| Single | $15,750 |
| Married Filing Jointly or Qualifying Widow(er) | $31,500 |
| Married Filing Separately | $15,750 |
| Head of Household | $23,625 |
These amounts reflect OBBBA adjustments and annual indexing. (IRS)
Other 2025 Personal Tax Changes
State and Local Tax (SALT) Deduction
The SALT deduction cap increases from $10,000 to $40,000 through 2029 (indexed for inflation) and reverts to $10,000 in 2030, with phase-outs at higher income levels.
Senior “Bonus” Deduction
Taxpayers aged 65 or older can claim an additional $6,000 deduction ($12,000 for eligible couples) from 2025 through 2028, subject to an income phase-out ($75K MAGI for single filers, $150K MAGI for joint filers).
Tip & Overtime Income Deductions
New deductions allow up to $25,000 for reported tip income per filer and up to $12,500/$25,000 for qualified overtime pay. Phase-outs apply based on income thresholds. Tip deductions phase out at $150K MAGI single ($300K joint). Overtime deduction is capped at $12,500 (single) / $25,000 (joint); with the same phase-outs as those for tips.
Auto Loan Interest Deduction
Interest on qualifying auto loans (for U.S.-assembled vehicles acquired after 2024) can be deductible up to $10,000 per year, subject to income phase-outs.
Reshaping Itemized Deductions
OBBBA changes certain itemized deduction rules, which may affect how and when you choose to itemize versus claiming the standard deduction.
Other Updates
- Child Tax Credit increases to $2,200 per qualifying child (indexed beginning 2026).
- Estate and gift tax exemptions rise to $15M (single) and $30M (joint).
- New tax-advantaged child savings accounts (“Trump Accounts”) for children under age 8.
Impacts on Business Owners
2025 Business Tax Changes
Bonus Depreciation & Expensing
Full bonus depreciation and expanded expensing for certain real property help businesses recover costs sooner.
Section 199A (Qualified Business Income) Deduction
The valuable 20% QBI deduction for pass-through entities is now permanent, with expanded phase-outs and a minimum deduction for qualifying income.
Section 179 Expensing
The Section 179 maximum deduction increases to $2.5 million, boosting upfront deductions for smaller business assets.
Pass-Through Entity Tax (PTET)
Pass-through entities can continue paying state income tax at the entity level, reducing the taxable income passed to owners.
Charitable Contribution Deductions
Nonitemizers may now deduct charitable gifts up to a specified limit, and itemized contributions face new floors.
Provisions Ending With OBBBA
While OBBBA extends many tax incentives, several energy-related credits and accelerated depreciation benefits are expiring:
| Credit or Incentive | Expiration / Phase-Out |
|---|---|
| Residential Clean Energy Credits (solar, wind, battery) | Ends 12/31/2025 |
| Energy-Efficient Home Improvement Credit | Ends 12/31/2025 |
| Energy-Efficient Home Builders (Section 45L) | Ends for homes acquired after 6/30/2026 |
| Commercial Solar & Wind (Section 48E) | Ends 12/31/2027 (construction deadline 7/4/2026) |
| Electric Vehicle & EV Charger Credits | EV credits end 9/30/2025; charger credits end 6/30/2026 |
| Accelerated Depreciation for Energy Property | Only 100% bonus depreciation remains after 1/19/2025 |
Planning around these expirations can help ensure you maximize benefits before they sunset.
How JPC Tax & Advisory Can Help
The changes and updates outlined in the OBBBA bring both opportunities and deadlines. At JPC Tax & Advisory, we help personal tax clients and business owners to:
- Navigate new and permanent deductions and limits
- Maximize available tax benefits before they expire
- Build tax strategies for 2025 and beyond with confidence
Stay proactive — let us help you adjust your tax planning and make the most of these updates.
