The tax landscape just shifted — dramatically.
President Trump recently signed the “One Big Beautiful Bill” into law, bringing the most significant tax changes in years. From employees and families to entrepreneurs and charitable donors, this new legislation may impact your 2025 tax return and beyond.
Let’s break down the key changes:
Your tax rates just got locked in. Remember those lower tax rates from 2017 that were set to expire? They’re now permanent. The top tax rate stays at 37%, and all the existing brackets will continue to adjust for inflation each year. So what you’re paying now is what you’ll keep paying.
More of your income is protected from taxes. Starting with your 2025 tax return, the standard deduction increases to:
- $15,750 for single filers
- $31,500 for married couples filing jointly
This means more of your income is shielded from federal taxes, and fewer people will need to itemize deductions to get the highest tax benefits.
There are new ways to save on charitable giving. Even if you don’t itemize deductions, you can now deduct charitable contributions. In fact, you can deduct up to $1,000 ($2,000 for married couples) for cash donations to qualified public charities, right off the top.
Plus, the Educational Choice for Children Act creates a tax credit (not just a deduction) of up to $1,700 for donations to scholarship organizations that help families pay for private K-12 education.
There’s an increase in state tax relief (temporarily). If you live in a high-tax state and itemize deductions, you’ll want to pay attention to this one. The cap on state and local tax (SALT) deductions has been temporarily raised to $40,000 through 2029 — a huge jump from the previous $10,000 limit. Note that this benefit phases out for higher earners with income starting at $500,000, so not everyone will qualify for the full amount.
Other changes to be aware of:
Service workers may deduct up to $25,000 in tip income while overtime workers may deduct up to $12,500 in overtime pay
- Car buyers can deduct up to $10,000 in interest on loans for U.S.-made vehicles
- Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000
- Parents of children born between 2025 and 2028 can open special savings accounts that come with a $1,000 government-funded starting deposit
- Child tax credit increases to $2,200 per child
- The estate and gift tax exemption jumps to $15 million per person
Guiding you through change
If you have questions about how these changes affect your family or your long-term financial plans, we’re here to help. Contact the experts at Magone & Co to ensure you’re taking advantage of every benefit available to you under the new law. Reach out or give us a call today at (973) 301-2300.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your business situation.