Tax season is nearing and there have been some changes for those filing their 2025 taxes.
The One Big Beautiful Bill (OBBB) was signed into law on July 4, 2025. The bill extended some tax provisions and made others permanent. It also introduced some new laws, with others remaining the same.
Some of the current tax law provisions include the standard deduction that was nearly doubled in 2017 when the TCJA was signed. Since then, it’s been adjusted for inflation every year – but under the OBBB, the amounts are slightly higher.
The current seven tax brackets will remain permanently in place and include brackets 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Bonus depreciation is now permanently set at 100%, instead of 40%., which means businesses can now deduct the full cost of eligible equipment, machinery, and other qualified property in the year it’s placed into service, instead of spreading the deduction over time. Standard deductions increased, plus a new “bonus” deduction for older adults. Seniors ages 65and-up can get a bonus deduction of $6,000 per eligible person.
The child tax credit increased to $2,200 per qualifying child and will be adjusted by $100 increments going forward. The refundable portion, known as the Additional Child Tax Credit (ACTC), is now $1,700 for the 2025 tax year.
The SALT deduction cap increased temporarily, with income-based phaseouts. The SALT deduction, or state and local tax deduction, is a federal tax provision that allows taxpayers to deduct certain taxes they’ve paid to state and local governments from their federal taxable income. This helps prevent “double taxation” of the same income and is available only to taxpayers who itemize their deductions on IRS Schedule A (Form 1040), rather than taking the standard deduction.
Types of state and local taxes that generally qualify for the SALT deduction include state and local income taxes, real property taxes (real estate) and personal property taxes (cars and boats).
Concerning retirement contribution, retirement plan contribution limits for IRAs and 401(k)s also increased for 2026. Under the OBBB, the limit is temporarily increasing to $40,000 beginning in 2025, and it will increase by 1% for the next five years before it drops back down to $10,000. For tax year 2025, the maximum total employer and employee contributions that can be made to a defined contribution plan is $70,000 (plus catch-up contributions).
The maximum IRA contribution limit increased to $7,000 – and if 50 or older, the limit is $8,000. The elective deferral limit for 401(k), 403(b), and 457 plans for tax year 2025 is $23,500, with a $7,500 catch-up contribution if 50 or older. A higher catch-up contribution of $11,250 is available if 60-63.
A key income threshold to watch for high-income filers is $197,300 for singles and $394,600 for married couples filing jointly. Those are the respective thresholds for moving up from the 24% tax rate bracket to the higher 32% rate bracket. The top marginal income rate of 37% will apply to single filers with taxable income of $626,350 and, for married couples filing jointly, taxable income above $751,600.
Other items made permanent was the elimination of the miscellaneous itemized deductions moving expense deductions; the 20% passthrough deduction, which allows small businesses that are pass-through entities to deduct up to 20% of qualified business income on their federal income tax return; the $750,000 mortgage interest deduction limit; and the itemized deduction for personal casualty losses due to a federally declared disaster. Expiring tax benefits include the green energy credits and include energyefficient home improvements (windows, heat pumps, solar panels) ending Dec. 31, 2025; EV credits for new and used cars that expired Sept. 30, 2025; and the EV charger installation credit will end June 30, 2026.