Recent tax law changes to maximize your tax refund


One Big Beautiful Bill

Tax season is here, and with it comes a fresh set of updates to the U.S. tax code—the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. This major legislation made many 2017 Tax Cuts and Jobs Act (TCJA) provisions permanent, while introducing new breaks that could boost your refund or lower your bill in tax year 2026.

What's new?

Form 1099-DA for crypto transactions and Form 1098-VLI for car loan interest are new for the 2025 tax year.

What is included in the bill?

  • When did laws go into effect?

    The majority of these provisions take effect for tax year 2025—meaning they apply to income earned and deductions/credits claimed in 2025, which you'll report when filing in early 2026.
    Some additional changes kick in for tax year 2026 (filed in 2027), while a few less common provisions are retroactive to tax year 2024 (potentially allowing adjustments on amended returns or carryovers).

  • What got permanently extended?

    Certain tax provisions from the 2017 Tax Cuts and Jobs Act were permanently extended, including:
    Lower individual tax rates (10%, 12%, 22%, 24%, 32%, 35%, 37%)
    Nearly doubled standard deduction
    Child Tax Credit expansion
    Elimination of personal and dependent exemptions, and itemized deductions for miscellaneous expenses like unreimbursed employee expenses.

  • Reduced taxes on tips

    Qualified tipped income (up to $25,000) is now deductible as an above-the-line deduction for eligible workers in customary tipping occupations.
    This phases out for higher earners generally above $150,000 and applies through 2028.

  • Reduced taxes on overtime

    Eligible workers can deduct up to $12,500 of qualified overtime pay.
    It phases out at income above $150,000 levels and runs through 2028.

  • Extra deduction for seniors

    If you're 65 or older, claim an additional $6,000 deduction.
    The deduction phases out at $75,000 and at $150,000 if you’remarried filing jointly.
    This is temporary through 2028.

  • Deduction for car loan interest

    A new above-the-line deduction allows up to $10,000 in interest paid on qualified personal auto loans (for new U.S.-assembled vehicles) through 2028.
    This deduction phases out when income is above $100,000 and for married couples with incomes above $200,000.

  • Child Tax Credit Increase

    Starting in tax year 2025, the Child Tax Credit will permanently increase to $2,200 per child under 17.
    To claim this credit, a valid Social Security number is required for the children and the taxpayer claiming the Child Tax credit (married filing joint returns only one spouse is required to have a valid Social Security number).

  • Increased SALT deduction for homeowners

    The state and local tax (SALT) deduction including local income, sales, and property taxes has its cap increased from $10,000 to $40,000, effective for tax year 2025.
    The cap increases to $40,400 for 2026 and increases 1% every year after through 2029. Phase out begins at incomes above $500,000.

    This change benefits filers in states with high state and property taxes, allowing them to deduct more of their related expenses.

  • Some energy efficient tax credits being eliminated

    The One Big Beautiful Bill Act (OBBBA) phases out several energy-related tax breaks early:
    Energy-efficient home upgrades (like windows, doors, insulation, or solar panels).
    New/used EV credits (up to $7,500 for qualifying electric vehicles) are no longer available for vehicles bought after September 30, 2025.

  • Personal and dependent exemptions eliminated

    Personal and dependent exemptions are permanently eliminated. Although they were set to return in 2026, the new bill makes the elimination permanent.

  • Employee expense deduction eliminated; self-employed deductions boosted

    As a self-employed individual or business owner, you may be eligible for significant tax deductions.
    The 20% Qualified Business Income Deduction is now permanent, with phase-in ranges increased to $75,000 ($150,000 for married filing jointly). 

    You can also deduct 100% of business equipment expenses placed into service after January 19, 2025.
    Note that unreimbursed employee expenses are no longer deductible, but self-employed individuals can still deduct home office expenses.

OBBBA changes

The One Big Beautiful Bill Act (OBBBA) makes the larger standard deduction from the 2017 Tax Cuts and Jobs Act (TCJA) permanent—so it won't shrink or expire after 2025. This gives most filers a bigger tax-free chunk of income right away, especially if you don't itemize.
For tax year 2025 (returns filed in 2026), the amounts are boosted slightly beyond standard inflation adjustments:
Single or Married Filing Separately: $15,750
Head of Household: $23,625
Married Filing Jointly or Qualifying Surviving Spouse: $31,500
These higher figures help reduce your taxable income more than in prior years without the OBBBA boost.