The One Big Beautiful Bill (OBBB) has arrived—bringing nearly 900 pages of tax changes with it. While it’s intended to be a permanent overhaul, some of the most impactful provisions come with expiration dates.
Let’s take this bill one piece at a time and start with something that applies to all of us: deductions.
What Is A Deduction?
This is the part of your income that isn’t taxed. You can either take the standard deduction (a flat amount) or itemize your real-life expenses—like mortgage interest, medical bills, and state and local taxes. You take whichever gives you the better deal.
This is the part of your income that isn’t taxed. You can either take the standard deduction (a flat amount) or itemize your real-life expenses—like mortgage interest, medical bills, and state and local taxes. You take whichever gives you the better deal.
The New Standard Deduction
Starting in 2025, the standard deduction gets a boost:
Starting in 2025, the standard deduction gets a boost:
- $15,750 for single filers (up from ($14,600)
- $31,500 for married couples filing jointly (up from $29,200)
- If you’re over 65, you get an extra $2,000 (single) or $1,600 per qualifying spouse
Itemizing and the SALT Deduction Get a Makeover
This could be significant for those of us in high-tax states. The SALT cap (State and Local Taxes) used to be stuck at $10,000, which meant many people were paying local taxes with after-tax dollars. Under the new law:
This could be significant for those of us in high-tax states. The SALT cap (State and Local Taxes) used to be stuck at $10,000, which meant many people were paying local taxes with after-tax dollars. Under the new law:
- The SALT cap jumps to $40,000 and ticks up 1% each year.
- This all expires in 2030, when it drops back down to $10K for good.
- The higher SALT deduction starts shrinking once your income hits $250,000 (single) or $500,000 (married).
- If you’re over that, your deduction gradually returns to the $10K cap.
A Bonus Deduction for Those 65 and Over
Social Security Income will not be tax free. Instead, a $6,000 bonus deduction will be given for each filer over age 65.
Social Security Income will not be tax free. Instead, a $6,000 bonus deduction will be given for each filer over age 65.
- Filers get an extra $6K each whether they itemize or take the standard deduction
- A married couple over 65 could see up to $46,700 in total standard deductions ($31,500 + $3,200 + $12,000)
- This provision expires in 2028.
- The $6K bonus phases out at $75,000 (single) and $150,000 (married)
The Takeaway
The key is to stay ahead of the deadlines and plan with purpose – especially if you’re thinking about ROTH conversions or just want to keep more of your income.
The key is to stay ahead of the deadlines and plan with purpose – especially if you’re thinking about ROTH conversions or just want to keep more of your income.
There’s plenty more to cover in the weeks ahead. For now, take a breath, pour a coffee, and go outside and enjoy this beautiful summer.
Tax season will be here soon enough.
Barbara
July 13, 2025
Source: https://taxfoundation.org/research/all/federal/big-beautiful-bill-senate-gop-tax-plan/
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