Massive updates from the One Big Beautiful Bill Act (OBBBA) are reshaping the tax code in 2025. From higher standard deductions to new credits and some surprising phaseouts, these changes could either save you thousands or cost you if you’re unprepared.

Here’s a breakdown of the updates that matter most for business owners and families this year.

Bigger Standard Deduction

Starting in 2025, the standard deduction jumps to: $15,750 for individuals $31,500 for joint filers $ and 23,625 for heads of household. This means more taxpayers will skip itemizing and claim the bigger automatic deduction.

Child Tax Credit Boost

Good news for families: the child tax credit increases to $2,200 per child in 2025. Up to $1,400 remains refundable (meaning you can get it even if you don’t owe taxes).

New Car Loan Interest Deduction

For 2025–2028, individuals can now deduct up to $10,000 per year in qualifying car loan interest. Starts phasing out at $100,000 of modified adjusted gross income (single) or $200,000 (married filing jointly).

Energy Credits Expire Soon

The 30% credit for home energy improvements and clean energy systems ends after December 31, 2025. If you’re planning solar, efficiency upgrades, or similar investments, 2025 may be your last chance to claim this powerful tax break.

Deduction for Tips & Overtime

For 2025–2028: Workers can deduct up to $25,000 in qualified tip income and up to $12,500 in overtime pay. These benefits phase out at an income of $150,000 ($300,000 if married filing jointly).

Estate & Gift Tax Planning Opportunity

Beginning in 2026, the estate and lifetime gift tax exemption increases permanently to $15 million (indexed for inflation). High-net-worth families should plan now to take advantage of this expanded exemption.

What to Do Next

Tax planning doesn’t start in April - it begins today. Review these new rules with your advisor. Adjust your 2025 plans to capture every deduction. Don’t leave money on the table.

Contact Brothers Tax Firm to find out how these new laws impact you and what moves you should make this year.