Navigating the Individual One Big Beautiful Bill

The bill locks in lower federal tax rates that already been in place since the Tax Cuts & Jobs Act. For most people, this means more take-home pay each year, across all income brackets. Wealthy earners also get a cut, but the percentage decrease is often greatest for the middle brackets.

The standard deductions you’ve surely noticed for the last several years have been extended. You can now subtract a bigger basic amount from your taxable income—over $30,000 if married, $15,000+ if single. Many people will find itemizing expenses (like mortgage interest, medical, etc.) less valuable—this move simplifies filing for most.

Prior to the TCJA, you got a small deduction for each household member; that’s gone, continuing recent rules—but the higher standard deduction and child credit will often offset this loss for many families.

Worth more per child (now $2,000+), and more of it is refundable, so even if you owe little or no income tax, you can still get cash back. The credit is increased to $2,500 per child for tax years 2025 through 2028. It requires a valid SSN for both taxpayer and child.

The amount you can inherit (or give away during your life) without federal tax is now roughly $30 million per couple (starting in 2026). This mostly helps wealthy families with large inheritances or expensive farmland/businesses.

Higher exemption limits and phase-outs mean that the AMT, designed to make sure high-earners pay at least some tax, will now hit far fewer people. Middle-income earners are almost never affected anymore.

You can still deduct mortgage interest, but only if your loan is $750,000 or less—not $1 million as in the past. Casualty losses are only deductible if they’re tied to a federally declared disaster, so routine losses (like a fire that isn’t from a big event) generally don’t count.

If you’re a high earner, the benefit of your itemized write-offs (like state taxes, donations, and mortgage interest) is capped, so you can’t deduct as much as before. Miscellaneous deductions—including unreimbursed employee expenses—are eliminated for everyone.

Moving expenses (except for active-duty military) and the ability to exclude employer-provided bicycle commuting reimbursements are gone.

You can only claim gambling losses up to 90% of the amount of your gambling winnings—no more deducting associated expenses (like travel or meals) above what you actually won.

Parents and people with disabilities can save more in special ABLE accounts for future needs. There’s also more flexibility in rolling 529 education savings plans into ABLE plans, useful for families with special needs kids. 529 plans can also now cover more education-related expenses.

If a student loan gets wiped out because of your death or a total disability, you or your family won’t owe tax on the canceled debt anymore.

For the next four years, workers who earn tips (like servers, bartenders) or overtime can directly knock off a chunk of those earnings before income tax is calculated—helping folks who rely heavily on tips or extra hours.

There will be a deduction of $25,000 for qualified tips received. This deduction is allowed from taxable years 2025–2028.

There will be a deduction of up to $12,500 ($25,000 for married filing joint) for qualified overtime compensation received during tax years 2025–2028.

If you’re 65+ and have moderate income, you get an extra deduction worth $4,000 from now until 2028, so your taxable income is lower.

Buying a car built in the US? Middle-income earners (for the next few years) get to deduct car loan interest, making new car payments a bit easier.

If you’re adopting a child, you can now claim a larger tax credit for the significant expenses involved in adoption.

More people can write off some charity donations even if they don’t itemize; 529 accounts expanded to cover new expenses like apprenticeship programs.

Your company helping pay student loans? Some of that can be tax-free. Lost property in a major disaster? You can get a new deduction for some losses.

New savings vehicles with tax-free growth, similar to Roth IRAs, but with a couple of unique twist—easier access or lower age limits for withdrawals for certain expenses.

You can deduct up to $40,000 in state and local taxes instead of $10,000 from 2025 to 2029, though income phase-outs apply (i.e., married couples making under $500,000 get the full benefit). This mostly helps residents of states with high taxes.

If you claim big losses from passive investments (like syndicated partnerships), you can’t offset all other types of income against these losses—intended to curb “tax shelter” abuses.

The EITC (for low-income workers and families) is expanded: more generous phase-outs, higher maximum credits, and easier qualification for childless workers.