Retirement Planning Education, with Andy Panko

#159 - SPECIAL EDITION...Provisions of the "One Big Beautiful Bill Act" most likely to impact your tax return

Jul 8, 2025

Discover the intriguing provisions of the recently enacted One Big Beautiful Bill Act that could reshape your tax return. Highlights include the permanency of current federal tax rates, a slight increase in standard deductions, and a new personal exemption for seniors. Dive into changes affecting mortgage interest deductions and a temporary boost in State and Local Tax deductions. Learn about the innovative savings accounts for kids and the elimination of various tax credits, all while clarifying misconceptions around Social Security taxation.

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INSIGHT

No Social Security Tax Changes

The bill does not change how Social Security is taxed.
Misinformation suggested Social Security would become mostly non-taxable, but it remains unchanged.

INSIGHT

Miscellaneous Deductions Eliminated Permanently

The elimination of miscellaneous itemized deductions is now permanent.
Taxpayers cannot deduct expenses like tax preparation and investment advisory fees anymore.

INSIGHT

Temporary SALT Deduction Increase

SALT deduction cap temporarily increases from $10,000 to $40,000 from 2025 through 2029.
The higher cap phases out for incomes between $500,000 and $600,000.

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In the SPECIAL EDITION episode, Andy summarizes the key provision of the recently signed into law One Big Beautiful Act that are most likely to impact you and your tax return. The topics summarized are:

Permanency of the current federal tax rates
Permanency, and a slight increase, to the current standard deduction amounts
A new temporary personal exemption up to $6,000 per person 65 or older
Permanency, and a slight increase, to the lifetime gift and estate size exemption
Permanency of the current Alternative Minimum Tax exclusion amount, but reduction/reversion of its income phase out levels
Permanency of the $750,000 limit on residential mortgage principal against which interest can be deducted
Permanency of the elimination of miscellaneous itemized deductions
Temporary increase to $40,000 for State and Local Tax ("SALT") deductions
A new permanent charitable deduction for people who use the standard deduction
A new minimum AGI-based floor on charitable donations before donations can be itemized deductions
A temporary exclusion from income tax of up to $25,000 tip income
A temporary exclusion from income tax of up to $25,000 of overtime income
A temporary deduction of up to $10,000 of interest loans to buy cars whose final assembly was in the U.S.
Recissions of multiple "Green New Deal" tax credits such as electric vehicle credits and residential clean energy credits
Creation of new "Trump" savings accounts for children under 18
And the bill having NO changes with regards to how Social Security is taxed (i.e. the bill did NOT make Social Security not taxable)

Links in this episode:

Final text of the One Big Beautiful Bill Act - here
My written summary of the key individual income tax provisions of the One Big Beautiful Bill - here

To send Andy questions to be addressed on future Q&A episodes, email andy@andypanko.com

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