The One Big Beautiful Bill Act

Hi there, my name is Scott Johnson, and thank you for watching the Financial Success Academy. In this video, we're going to break down some of the biggest tax law changes from the recently passed One Big Beautiful Bill Act, or OBBBA, and talk about what those changes could mean for your personal finances. The OBBBA, signed into law on July 4th, 2025, made many of the tax law features of the 2017 Tax Cuts and Jobs Act permanent, but it also created some new features. Here’s a breakdown of the largest tax law changes that could impact you and your family.

First, prior to the passing of OBBBA, the current income tax brackets were set to sunset at the end of 2025 and revert back to the significantly higher rates that were in place before the 2017 Tax Cuts and Jobs Act. The current tax brackets are now permanent as follows: 10%, 12%, 22%, 24%, 32%, 35%, and the highest bracket at 37%.

Other notable changes from the OBBBA include: an increase in the standard deduction to $15,750 for singles and $31,500 for married couples; a bonus deduction of $7,600 for those ages 65 and older; an increase in the state and local tax (SALT) deduction from $10,000 to $40,000 for those earning less than $500,000; an increase in the child tax credit from $2,000 to $2,200; and an increase in the estate and gift tax exemption to $15 million per individual and $30 million for a married couple.

Additional provisions include a deduction of up to $25,000 on tip income; a deduction on overtime pay up to $12,500 per individual or $25,000 for those filing jointly, with these deductions phasing out for individuals earning more than $150,000 ($300,000 for joint filers); and a deduction of up to $10,000 on auto loan interest. The bill also creates government-funded trust savings accounts for children, with a one-time credit of $1,000 for newborns born between 2025 and 2028. For those who donate to charities but do not itemize, there is now a $1,000 charitable deduction for single individuals and a $2,000 deduction for married couples.

Overall, the One Big Beautiful Bill is a major piece of legislation, creating a number of financial planning opportunities for our clients. If you’d like to better understand how this new law may affect your personal income taxes, we strongly encourage you to consult with your tax professional.

Thanks for watching, and as always, stay safe out there.