1. Standard Deduction (2025)
For 2025, the inflation-adjusted standard deduction amounts are:
- Married Filing Jointly/Qualifying Surviving Spouse: $30,000
- Single or Married Filing Separately: $15,000
- Head of Household: $22,500
These amounts reflect an increase from 2024: $29,200 for MFJ, $14,600 for single filers, and $21,900 for heads of household.
Looking ahead, the OBBBA will further increase these deductions for 2026 and beyond, with the standard deduction for heads of household set at $23,625 and $15,750 for singles.
2. Individual Tax Brackets and Rates
For 2025, the tax brackets under the 2017 Tax Cuts and Jobs Act (TCJA) remain in effect, with inflation adjustments for the year. The OBBBA will make these lower TCJA rates permanent starting in 2026, preventing the reversion to higher pre-2018 rates.
3. Child Tax Credit (CTC)
For 2025, the CTC stays at $2,000 per qualifying child, with a refundable amount of up to $1,700 (pending IRS inflation adjustments for 2025).
In 2026, the OBBBA increases the CTC to $2,200 per child, makes the expansion permanent, and applies annual inflation adjustments.
Note: Stricter Social Security Number (SSN) requirements for both the taxpayer and the child will apply in future years.
4. Retirement Plan Contribution Limits
For 2025, the retirement plan contribution limits are as follows:
- 401(k), 403(b), most 457 plans, and Thrift Savings Plan: $23,000 ($30,500 if age 50 or older)
- Traditional and Roth IRAs: $7,000 ($8,000 if age 50 or older)
- SIMPLE IRA: $16,000 ($19,500 if age 50 or older)
These limits are adjusted for inflation. The OBBBA does not change the annual inflation adjustment mechanism for these limits.
5. Qualified Business Income (QBI) Deduction (IRC §199A)
For 2025, the QBI deduction remains available with a phase-in threshold of $50,000 ($100,000 for joint filers).
Starting in 2026, the OBBBA increases the phase-in threshold to $75,000 ($150,000 joint) and establishes a $400 minimum deduction for active business income, with inflation adjustments.
6. Estate and Gift Tax Exemption
For 2025, the estate and gift tax exemption is $13.99 million per individual, adjusted for inflation.
In 2026, the exemption will permanently increase to $15 million per individual, with inflation adjustments beginning in 2027.
7. State and Local Tax (SALT) Deduction Cap
For 2025, the SALT deduction cap increases to $40,000 ($20,000 for MFS), with phase-downs for higher incomes. The cap is set to revert to $10,000 after 2029.
8. Other Significant Individual Tax Changes
- Personal Exemptions: Suspended, but a new $6,000 deduction for seniors (65+) will be available through 2028.
- Alternative Minimum Tax (AMT): Increased exemption and phase-out thresholds made permanent, with adjustments for inflation.
- Mortgage Interest Deduction: The $750,000 cap remains permanent, and mortgage insurance premiums are treated as interest.
- Charitable Contributions: The above-the-line charitable deduction increases to $1,000 ($2,000 for joint filers), with a new AGI floor of 0.5% for individuals and 1% for corporations.
9. Business Tax Changes
- Bonus Depreciation: 100% expensing for qualified business property becomes permanent for property acquired after January 19, 2025.
- Section 179 Expensing: Limit increased to $2.5 million, with a phase-out threshold at $4 million.
- Research and Experimental (R&E) Expenditures: Domestic R&E expenses can be fully expensed immediately for taxable years beginning after December 31, 2024.
- Paid Family and Medical Leave Credit: Made permanent and expanded to include insurance premiums.
10. Energy and Green Tax Credits
The OBBBA terminates clean energy credits, including the clean vehicle credit, for property placed in service or acquired after specific dates in 2025 and 2026.
11. Information Reporting
- Form 1099-MISC/NEC Threshold: Increased to $2,000 for payments made after December 31, 2025.
- Form 1099-K: The $2,000 reporting threshold applies for payments made after December 31, 2025.
12. Other Notable Provisions
- No Tax on Tips and Overtime (Temporary): Up to $25,000 in qualified tips and up to $12,500 ($25,000 joint) in qualified overtime pay per year will be deductible through 2028.
- Trump Accounts for Children: New tax-advantaged accounts for children under 18, with a $5,000 annual contribution limit, become available in 2026.
13. Health and ACA-Related Changes
- Premium Tax Credit (PTC): Eligibility will be restricted to U.S. citizens, nationals, and certain lawfully present aliens starting in 2027.
- Safe Harbor for Telehealth Services: Permanent for high-deductible health plans.
14. Annual IRS Inflation Adjustments
Many thresholds, phase-outs, and limits (including standard deductions, tax brackets, retirement plan contributions, etc.) are subject to annual inflation adjustments. For the 2025 figures, refer to IRS Rev. Proc. 2024-40 and IRS News Release IR-2024-273.