Big tax changes are here! On July 4, 2025, the One Big Beautiful Bill Act (yes, that’s really what it’s called!) was signed into law. This new bill brings some major updates to the tax world—some of which are sticking around for good, and others that will last through 2028.

Here’s what you need to know, in plain English, about these incoming tax changes.

The Big Picture on Tax Changes in the “OBBBA”

This bill makes many of the 2017 tax changes permanent. Previously, these rules were set to expire at the end of 2025. If you’ve gotten used to how things have worked these past few years, the good news is that most of those rules are here to stay.

Here are some of the big ones:

• Lower income tax brackets are locked in, with the top tax rate staying at 37%.
• The higher standard deduction remains in place (and personal exemptions stay gone).
• The $750,000 cap on mortgage interest deduction continues.
• Some itemized deductions—like tax prep fees, investment fees, and unreimbursed work expenses—are still off the table.
• The 20% qualified business income (QBI) deduction (a big deal for business owners) is now permanent.
• The estate and gift tax exemption stays high (which is good news for those planning to pass on wealth).

What’s Changing?

While a lot of the “changes” included in the bill were aimed at making previous changes permanent, some new things came through as well. Here are the new tax changes that we think matter most:

• Itemized deductions now have new limits.
• The SALT deduction (state and local taxes) has increased, but only for the next five years.
• If you usually don’t itemize, there’s a new perk: you can now deduct charitable donations (up to a certain limit based on your filing status).
• If you do itemize, charitable giving is still deductible, but now with a minimum at just a bit over your income (specifically, 0.5% above your AGI).
• And if you donate to scholarship organizations that help K–12 students? You now get to choose between a tax credit (up to $1,700) or a deduction. Not bad!

Thinking Green? Act Fast!

The OBBBA also sunset two popular green initiatives. 2025 is your last chance to claim those popular energy tax credits.

• Electric vehicle credit: Only applies to EVs purchased before September 30, 2025.
• Solar tax credit: Ends for systems installed after December 31, 2025.

So, if you’ve been thinking about going solar or switching to an EV—now’s the time. After the deadline, the tax credits will no longer be a perk of purchase.

What’s New?

The tax changes do include a few new benefits that Americans will benefit from for a limited time. Here are a few brand-new goodies in the bill:

• A deduction for certain tip income and qualified overtime pay—yes, some of that money may now be tax-free!
• A deduction for car loan interest on new vehicles that are assembled in the U.S.

For Business Owners

Changes aren’t coming just for individuals. Here are some of the most important tax changes for business owners.

• 100% bonus depreciation is now permanent. This is GREAT news if you’re investing in new equipment.
• The Sec. 179 deduction cap has increased.
• You can now immediately deduct qualifying R&D (Research & Development) expenses.

Final Thoughts

These tax changes might sound exciting, disappointing, or just plain annoying. How much they will impact you really depends on your situation. Some of these deductions and credits come with income limits and phaseouts, so the details matter.

Don’t let these tax changes scare you! We’re here to help. If you want to strategically plan for these changes, reach out to your Advisor for tax planning if you haven’t done so already. If you aren’t a current client, but still want to know how this changes may impact your unique situation, try setting a meeting with us.