Have you been wondering how the One Big Beautiful Bill may impact you? Here are some of the key takeaways you need to be aware of.
Personal:
There are seven permanent tax brackets indexed for inflation: 10%, 12% 22%, 24%, 32%, 35%, and 37%. As well as an increase to the standard deduction: Single, married filing separately: $15,700, Head of Household: $23,625, Married Filing Jointly: $31,500.
State and Local Tax: Deductions for real estate, tax, state income tax, and sales tax have retroactively increased from $10,000 to $40,000 with phase out at $500,000
Charitable Contributions Deductions Limitations: For Non-itemized returns, donations starting 2026 will have allowed deductions of $1,000 for single filers and $2,000 for married filing jointly.
Children: Non-refundable tax credit is permanently at $1,400 adjusted for inflation. There also is a new “Trump Accounts” program for children that allows annual nondeductible contributions of up to $5,000 with no withdrawals before age 18 and the funds are not subjected to tax during this period. An employer can make annual contributions in the amount of $2,500. Each child born between 2025-2028 will qualify to receive $1,000 government-funded contribution.
Auto Loan Interest Deductions: From 2025 to 2028 Interest Deductions up to $10,000 are allowed with respect to interest on loans for U.S assembled vehicles.
No tax on overtime: From now to 2028 there is a deduction allowed for qualifying overtime compensation. Limited to $12,500 per taxpayer however, and a phaseout applies for income over $150,000 for single filers and $300,000 for joint filers.
Business:
Form 1099 Reporting: If you have paid a vendor $2,000 or more, you are required to report via the 1099-MISC or 1099-NEC. (Maximum before reporting used to be $600)
Accelerated Depreciation for Manufacturing Facilities: Bonus depreciation allowed for qualified production property used in the U.S -based manufacturing, refining or production. To which construction began after Jan 19, 2025 and before January 1, 2029 but placed in service before January 1, 2031.
Interest Payment Deductions: Reinstating EBITDA based limitations on business net interest deductions from 25-29
Business Meals: Come 2026 most business meal deductions will no longer be allowed.
Qualified Business Income Deduction: The phaseout limits have increased, however the deduction rate of 20% will remain the same. Taxpayers with at least $1,000 QBI will have a minimum of a $400 deduction.
Bonus Depreciation: The 100% bonus depreciation deduction for qualified property acquired after January 19, 2025 is reinstated.
As of September 30th 2025, it is required that all federal tax payments must be made to the IRS electronically. Those taxpayers who have been using checks to make tax payments will need to begin using electronic payments like EFTPS or IRS Direct Pay System.
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