25 Takeaways From the Big Beautiful Bill

The newly passed legislation, referred to as the "Big Beautiful Bill” (BBB), brings one of the most comprehensive overhauls to the U.S. tax code in recent memory. This bill includes wide-reaching changes that will impact individual taxpayers, business owners, and investors alike. This article covers the biggest changes to personal taxes, with additional articles to follow as more details are confirmed by Congress.

Temporary Laws Made Permanent

1. In 2025, the standard deduction increases to $31,500 for married filers and $15,750 for individuals, offering broader relief for filers who do not itemize.

2. The adjusted tax brackets introduced by the TCJA, set to expire in 2026, are now made permanent, offering a more predictable and inflation-adjusted structure that protects more of your income from higher tax brackets.

3. Estate and gift tax exemptions remain at $15 million and increase for inflation starting in 2026.

4. Homeowners can continue deducting mortgage insurance premiums.

5. Most miscellaneous itemized deductions are now permanently eliminated. Deductions such as job-related expenses and investment-related expenses were previously paused and set to resume in 2026.

6. Student loans discharged due to death or disability will remain tax-exempt with valid SSN reporting.

7. Employer student loan payments remain tax-free, with inflation indexing starting in 2026.

8. Personal and dependent exemptions are also permanently removed.

Changes to Deductions

9. The State and Local Tax (SALT) deduction cap will temporarily rise from $10,000 to $40,000 in 2025, increasing by inflation through 2029, before reverting to $10,000.

10. Qualified tips will be deductible (up to $25,000 for individuals and $50,000 for joint filers) through 2028. This benefit applies to non-itemizers and includes new reporting obligations which are yet to be determined

11. Similarly, overtime compensation up to $12,500 (or $25,000 for joint returns) can be deducted, also through 2028. The deduction begins to phase out for single filers with a modified adjusted gross income (MAGI) above $150,000 ($300,000 for joint filers).

12. Full 100% bonus depreciation is made permanent for property acquired after January 2025, removing the previous phasedown of 40%.

13. Section 179 expensing gets a significant boost, with the maximum deduction raised to $2.5 million and the phase-out threshold to $4 million.

14. The BBB introduces a temporary $6,000 deduction for seniors over the age of 65 through 2028.

15. Small business owners and self-employed individuals will benefit from increased Qualified Business Income (QBI) deduction phase-in thresholds—rising to $75,000 for single filers (up from $50,000) and $150,000 for joint filers with a Specified Service Trade or Business (SSTB)

16. Casualty loss deductions will now include state-declared disasters, meaning that casualty losses can be taken for either federal or state declared disasters.

17. Interest on qualified car loans will be deductible between 2025 and 2028. The deduction begins to phase out for single filers with a modified adjusted gross income (MAGI) above $100,000 ($200,000 for joint filers).

18. Charitable giving sees multiple changes. First non-itemizers may now deduct up to $1,000 ($2,000 for joint filers).

19. For charitable taxpayers itemizing on their return, individuals face a 0.5% AGI floor on charitable giving.

20. Gambling deductions can now only be taken up to 90% of winnings, compared to the previous deductions of 100% of winnings.

21. 529 plans can now be used for a wider range of expenses, including various educational therapies and credentials. Additionally, up to $20,000 per year can be used for elementary or secondary education, such as tuition and books (up from $10,000)

Additional Credits

22. The Child Tax Credit receives a boost, increasing from $2,000 to $2,200, with a refundable portion of $1,400. To claim the credit, a valid Social Security number is required.

23. The bill also launches a new savings vehicle known as the "Trump Account," which allows for tax-free contributions and distributions under specific rules. A pilot program enables tax payments or credits for contributions made on behalf of eligible children, with more details to be released.

24. The adoption credit becomes partially refundable (up to $5,000) and inflation-adjusted.

25. The BBB terminates several clean energy-related credits, including clean vehicle and residential energy credits.

Final Thoughts

The Big Beautiful Bill introduces a sweeping set of reforms that will impact nearly every taxpayer in some way. To stay informed—additional articles will follow to explore other important aspects of this legislation. Whether you're a W-2 earner, business owner, investor, or retiree, now is the time to review your tax planning strategy.

As always, Monotelo Advisors is here to help you navigate these changes and maximize your tax efficiency. If you have questions about how the new law affects you, reach out to us today.

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