The One Big Beautiful Bill Act is now law. Let the 2025 tax planning begin.
The multitrillion-dollar tax and spending package enacted July 4 created several new tax breaks — such as the $6,000 deduction for Americans 65 and older and the break on up to $25,000 a year in tips — and expanded some existing ones, such as the child tax credit and the state and local tax deduction.
While the breaks will put more money in some taxpayers’ pockets, they create a new thicket of income limits and phase-out ranges that can have planning implications, particularly for clients in or near retirement.
For a look at some of the key changes, check out the chart below. It is worth noting that some deductions and credits are subject to a marriage penalty while others are not. Tipped employees, for example, can take a deduction of up to $25,000 whether filing individually or jointly, while the deduction for overtime is capped at $12,500 for individuals and $25,000 for couples.
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