07/07/2025
⚠️⚠️⚠️ TAX LAW CHANGES ⚠️⚠️⚠️
The One Big Beautiful Bill Act presents us with many tax changes that will have a direct impact on your 2025 tax return! There are many false and exaggerated tales going around Facebook and news websites about this bill that mislead the general public. Don’t worry about reading the bill word-for-word - we will for you!
Here are some of the top misleading headlines:
❌ “No tax on Social Security!”
✅ The bill does not affect the current taxation of social security. However, there will be an additional $6,000 deduction for taxpayers over 65, which trickles down to people paying less tax on their social security benefits.
❌ “No tax on Tips or Overtime!”
✅ There will be separate deductions for qualified tips and for qualified overtime. The qualified tips are only for a specific group of occupations that normally receive tips - the occupations will be specifically listed in an upcoming release by the Secretary of the Treasury. Also, for both of these deductions, there are income limits which begin phasing out at $150k single/$300k MFJ.
❌ Everyone can use itemized deductions again!
✅ The standard deductions are still above their pre-2018 levels, since when the majority of people have shifted to using the standard deduction. However, the SALT (state and local taxes) cap has been lifted from $10,000 to $40,000, meaning you can deduct, as part of your itemized deduction, up to $40,000 of state income tax, personal property tax, and real estate tax. Many more people will now be able to take advantage of itemizing their deductions, but not everyone!
There are many other areas that this bill affects:
- Auto loan interest deduction
- Child tax credit changes
- Bonus depreciation
- QBI deduction permanent
- Many more!
Please be on the lookout for an upcoming video series where Steven, one of our CPAs, will do deep dives into the specifics of certain areas of the new bill.
These are just three examples of how headlines can be misleading. Please consult with a tax professional or CPA about your individual situation to see how this bill will affect your paycheck, your tax refund, and your money!
Hamm & Glasbrenner CPAs