How the One Big Beautiful Bill could impact your 2025 taxes

• The One Big Beautiful Bill Act (2025 Tax Act) was signed into law on July 4, 2025, extending some provisions from the 2017 Tax Cuts and Jobs Act (TCJA) and introducing some new tax policies.
• Some of the key changes in the 2025 Tax Act include increases to the standard deduction, Child Tax Credit, and SALT deduction, as well as new temporary deductions for overtime pay and tips.
• The One Big Beautiful Bill Act increases the standard deduction to $15,750 for single filers and to $31,500 for those who are married and filing jointly.
• The One Big Beautiful Bill impacts the gambling (wagering) tax by lowering the amount of an itemized deduction you can take for gambling losses to 90% from 100% in 2026.
• The One Big Beautiful Bill Act increases the Child Tax Credit by $200 per child under the age of 17, to $2,200 from $2,000.
• The best way to prepare for the 2025 tax season with all its changes is to plan ahead and file with your local Jackson Hewitt Tax Pro.

What is the One Big Beautiful Bill Act (2025 Tax Act)?

The One Big Beautiful Bill Act (OBBBA), also known as the 2025 Tax Act, was signed into law by President Trump on July 4, 2025. This tax bill extends and modifies some of the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), and it also introduces some new tax policies.

Key 2025 tax changes from the One Big Beautiful Bill Act 

• Standard deduction: Increasing to $15,750 from $15,000 for single filers, and to $31,500 from $30,000 for those filing jointly.
• Child Tax Credit: Increasing to $2,200 from $2,000 per child under age 17.
• State and local tax deduction (SALT): Limit increasing to $40,000 from $10,000 for 2025, then by 1% each year through 2029. In 2030, the limit reverts to $10,000.
• Trump Accounts for child savings: New, temporary, one-time account funding of $1,000 per child born in 2025 through 2028.
• Senior deduction: New temporary $6,000 additional deduction for taxpayers 65 and older.
• Tips deduction: New temporary deduction worth up to $25,000 in tips.
• Overtime pay deduction: New temporary deduction worth up to $12,500 in overtime pay.
• Auto loan interest deduction: New temporary deduction worth up to $10,000 of annual interest on new auto loans.
• 1099-K reporting threshold: Reverts back to a previous threshold of $20,000 and 200 transactions.
• Full expensing of certain business property: Allows businesses to take a 100% bonus expense deduction for certain property purchased during the tax year.

2025 tax credits and deductions from the One Big Beautiful Bill Act

The tax bill increases some credits and deductions. As noted above, the Child Tax Credit is increasing to $2,200 from $2,000 per child under 17. The OBBBA increases the standard deduction for all taxpayers and the SALT deduction, and introduces some new temporary deductions, including the deduction for overtime pay and tips.

The 2025 Tax Act also amends many clean-energy tax credits by speeding up the “placed-in-service” deadline for solar and wind projects. The Clean Vehicle Credit will end in 2025.

Key 2025 tax changes

How does the One Big Beautiful Bill Act impact the 2025 standard deduction?

The OBBBA increases the standard deduction to $15,750 for single and married filing separately, $23,625 for head of household, and to $31,500 for those who are married and filing jointly.

The 2025 Tax Act also introduces a new deduction for seniors 65 and older. This deduction is worth up to $6,000 and available through 2028.

How does the One Big Beautiful Bill Act impact gambling tax? 

The One Big Beautiful Bill impacts gambling tax policy by reducing the deduction amount you can take for gambling losses to 90% from 100%. Previously, the itemized deduction allowed for wagering losses up to the amount of winnings.

This change does not go into effect until 2026. That means you can still deduct 100% of gambling losses as an itemized deduction that does not exceed the total of your gambling wins for the 2025 tax year (for the tax return you’ll file in early 2026).

How does the One Big Beautiful Bill Act impact the Child Tax Credit? 

The One Big Beautiful Bill Act increases the Child Tax Credit by $200 per child under the age of 17, to $2,200 from $2,000. This change goes into effect in 2025 and will be adjusted for inflation each year starting in 2026.

The Child Tax Credit is still partially refundable, up to $1,700. That means you could still get some of the money, even if you owe. For example, if you owe $500 in tax and qualify for the full $2,200 credit for your child, you will get up to $1,700 per child back as a tax refund.

What you can do to prepare for the 2025 tax season 

With the One Big Beautiful Bill Act recently signed into law, there are a lot of tax changes coming this year and beyond; however, the best way to prepare for the 2025 tax season remains the same: plan ahead.

If you want the lowest tax bill or the biggest tax refund when you file in 2026, now is the time to talk taxes with your local Jackson Hewitt Tax Pro. Taking a few minutes to think about your taxes now can help ensure that all your ducks are in a row and you’re set up to get every credit, deduction, and dollar of your refund, or a smaller tax bill if you owe.

Talk to a Jackson Hewitt Tax Pro about your situation 

Don’t file alone, and don’t wait until April 2026 to start thinking about your 2025 tax return. When life throws you tax changes in the form of a big, beautiful tax bill, you need big, beautiful tax help! Luckily, we’re open all year, and our Tax Pros are always ready to help. Book your appointment today to talk to a Tax Pro about your situation.

About the Author

Sharon Brucker is a Senior Tax Research Analyst at Jackson Hewitt Tax Services who specializes in consumer income tax and estate and trust issues. A Certified Public Accountant (CPA) with a Master of Business Administration (MBA) and more than 35 years of experience, Sharon helps to ensure that the most current IRS tax information is distributed throughout Jackson Hewitt and its franchisees. She also simplifies complex tax laws for Tax Pros and clients alike.

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