A Quick Glance at the Latest Tax Law Overhaul

Just before the July Fourth holiday, Congress passed a domestic policy bill that extended the 2017 tax cuts that were set to expire this year while making some of the 2017 rules permanent. The bill also created several new tax laws for individuals while addressing other tax issues for businesses.

Some of the changes will start this year, while others will kick in in 2026. Like previous tax laws, some of the new rules are scheduled to expire, while others are permanent.

Here’s a quick summary of five individual tax law changes that are expected to impact most tax filers in 2025.

Standard Deduction

• Current Law: $15,000 single; $30,000 married filing jointly

• New Law: $15,750 single; $31,500 married filing jointly

• Notes:

  • Both start in 2025

  • Slight change as part of new legislation

State and Local Tax Deduction (SALT)

• Current Law: $10,000 limit

• New Law: $40,000 limit; increases 1 percent through 2029, then reverts to $10,000 in 2030

• Note:

  • This may be a change for some as they prepare their 2025 taxes

“Bonus” Deduction for Older Adults

• Current Law: $1,600 for ages 65 and older; $2,000 unmarried / non-surviving spouse

• New Law: $7,600 for ages 65 and older; $8,000 for unmarried / non-surviving spouse

• Notes:

  • Both changes start in 2025 and end in 2028

  • New changes may present some opportunities to manage retirement income

Estate and Gift Tax Exemption

• Current Law: $13.99 million for single and $27.98 million for married filing jointly

• New Law: $15 million for single and $30 million for married filing jointly

• Note:

  • The new level starts in 2026, not 2025!

Charitable Deduction for Non-Itemizers

• Current Law: N/A after 2021

• New Law: $1,000 single and $2,000 married filing jointly

• Note:

  • This new level is permanent and starts in 2026

These are just some of the new individual tax law changes. The bill also included an updated child tax credit as well as new rules regarding tax on tips, overtime pay, and auto loan interest. On the business side, the bill updated the small business deduction and addressed the expensing of capital and factory investments.

If you see anything in the new legislation that you want to discuss, please reach out. The new bill has added new complexity to the tax code, so we're anticipating the IRS will issue some guidelines on how to interpret the updated rules later this year.

We also encourage you to speak with your tax professional if you have any questions about how the new changes may affect your specific 2025 tax return.

^{CNBC.com, July 3, 2025. “Tax changes under Trump’s ‘big beautiful bill’ — in one chart.”} 

^{FoxBusiness.com, July 4, 2025. “Five major policies to know from the One Big Beautiful Bill Act.”}

^{TaxFoundation.org, July 2, 2025. “The Good, the Bad, and the Ugly in the One Big Beautiful Bill Act.”}