Quick Take

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law—a sweeping package that makes many TCJA-era rules permanent and adds new, time-limited deductions. Below is the short, plain-English version, plus a checklist you can act on now.

The Big Headline Claims—And What They Actually Mean

2025 Tax Law Update: “No tax on tips”

Not a blanket tax-free pass. OBBBA creates a new above-the-line deduction (up to $25,000/year) for qualified tips in certain tipped occupations for 2025–2028, with income phaseouts. Tips must still be reported and remain subject to payroll (FICA) taxes and often state income tax. Treasury/IRS will publish the eligible occupation list by October 2, 2025.

“No tax on Social Security”

Not for everyone. The law adds a temporary $6,000 senior deduction (2025–2028) per qualifying taxpayer (age 65+), which—combined with the permanent standard deduction—means many seniors will owe no federal income tax on Social Security. Higher-income retirees may still be taxed; the deduction phases out above set MAGI thresholds. The White House has touted “most seniors” paying no tax on benefits, but the IRS worksheets will determine your actual result. H&R Block Tax preparation companyThe White House

“No tax on car loans”

Close, but it’s a deduction—not a total tax holiday. For 2025–2028, taxpayers may deduct up to $10,000/year of interest on loans for qualifying, U.S.-assembled passenger vehicles. It’s above the line (you can still take the standard deduction), subject to income limits, and leases don’t qualify. Confirm eligibility before you buy. IRSKiplinger

Clean Energy Credits: What’s Ending—and When

Thinking about solar or an EV? The timelines just moved up:

• Residential Solar (Sec. 25D) and Home Energy Efficiency (Sec. 25C): credits end after December 31, 2025. Projects placed in service in 2026 won’t qualify. RSM USTax Foundation

• EV Credits—New (30D), Used (25E), and Commercial (45W): credits end for vehicles acquired after September 30, 2025. Delivery and “placed-in-service” dates matter. K&L Gates

• EV Charging Equipment (30C): credit ends for property placed in service after June 30, 2026. K&L Gates

High-Impact Changes for Individuals (Recap)

• Permanent TCJA-style brackets & bigger standard deduction. 2025 standard deduction amounts: $15,750 (Single/MFS), $23,625 (HoH), $31,500 (MFJ); indexed annually. IRS

• Child Tax Credit increases to $2,200 per child beginning in 2025; indexed. Tax Foundation

• Estate & Gift exemption rises to $15M per person ($30M married) in 2026; indexed. Kiplinger

• SALT cap temporarily $40,000 per household (phases out over $500k MAGI), reverting to $10k in 2030. Investopedia

• Other extensions: adoption credit, employer childcare credit, paid family & medical leave credit, and education-related benefits continue (watch for IRS guidance updates). IRS

High-Impact Changes for Businesses (Recap)

• QBI deduction (199A) stays at 20%. Tax Foundation

• 100% bonus depreciation restored for property placed in service after Jan 19, 2025. Tax Foundation

• Section 179 expensing limit rises to $2.5M (phase-out at $4M), indexed after 2025. Kiplinger

• 163(j) interest limit now based on EBITDA (vs. EBIT). Tax Foundation

• Third-party network (1099-K): threshold reverts to $20,000 and 200 transactions. Arnold & Porter

• 1099-NEC/MISC: reporting threshold increases to $2,000 starting in 2026, indexed beginning 2027. Barnes Dennig

What to Do Now (Action Steps)

If you receive tips or overtime (2025–2028):Track tips meticulously (POS + payroll). We’ll confirm your occupation’s eligibility once IRS/Treasury publish the list.

If you’re 65+:Ask us for a 2025 projection to see whether the new $6,000 senior deduction wipes out tax on your Social Security—or whether other income will still trigger taxability under the usual rules.

If you’re considering a new car:Before you buy, verify U.S. final assembly, your loan terms, and MAGI to ensure the car-loan interest deduction is available to you.

If you’re planning solar or home upgrades:Line up contracts, permits, and installation so your system is placed in service by 12/31/2025. For EVs, mind the 9/30/2025 acquisition deadline; for chargers, 6/30/2026.

Business owners:Map capex to capture bonus depreciation, revisit entity structure/QBI, adjust interest-expense modeling, and update 1099 procedures for 2025–2026.

We’ll Keep You Posted

2025 Tax Law Update: Many provisions are permanent, but several are temporary (2025–2028) or hinge on forthcoming IRS guidance—especially the tip-deduction occupations and clean-energy transition rules. We’re tracking developments and will update you as forms and instructions are released.

Need a personalized plan?

We’ll run the numbers for your situation—individual, small business, or both—and build a 2025–2028 roadmap. Schedule a call with us for your personalized planning road map.