This article was brought to my attention recently when it appeared on LinkedIn. It was written by Patrick Horning, J.D., C.L.U, CFP, for Northwest Mutual and appeared July 10, 2025. Lots of good information, so much so that I’ve split it into two posts. I’ll post the rest of it next week. Meanwhile, read on for 7 of the 15 new tax law changes that might impact you.
Key takeaways
- The bill referred to as the One Big Beautiful Bill Act, signed into law on July 4, 2025, made many of the Tax Cuts and Jobs Act tax breaks permanent.
- The legislation introduced a few new tax deductions available for certain taxpayers.
- Your financial advisor can help you understand how these changes affect you and make suggestions to adjust your plan accordingly.
“The bill referred to as the One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, affecting what nearly all Americans will pay in taxes. It impacts everything from tax planning to charitable giving strategies to estate planning.
Many changes extend tax provisions of the Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025—making them “permanent.” But it’s important to note that when it comes to tax laws, permanent just means that there is no expiration date; it doesn’t mean that the laws can’t change down the road.
Knowing how the new tax law changes may impact your financial situation can help you make better-informed decisions about your money and plan for what’s ahead. Here we’ll detail some of the key tax changes coming and how they may impact you.
1. Individual income tax rates remain unchanged for 2026
Who is affected: All taxpayers
What the bill says: Tax rates established in TCJA will remain in place, meaning nearly all taxpayers will avoid a tax increase that would have kicked in at the end of 2025. The legislation provides more certainty about future tax rates, giving a clearer idea of what you’ll owe in taxes in the future.
2. The standard deduction permanently increased
Who is affected: Those who claim the standard deduction (which includes the vast majority of taxpayers)
What the bill says: The bill makes TCJA’s increase of the standard deduction permanent and increases the deduction even further. The standard deduction for 2025 will be $15,750 (single or married filing separately), $23,625 (head of household) and $31,500 (married and filing jointly). The bill says the standard deduction will continue to be adjusted for inflation going forward.
3. The State and Local Tax (SALT) deduction cap temporarily increased
Who is affected: Any taxpayer who itemizes deductions on their federal tax return
What the bill says: The State and Local Tax (SALT) deduction, an itemized deduction of certain state and local taxes, was capped at $10,000, and had been scheduled to expire. The new law increases the cap to $40,000 for 2025 and $40,400 for 2026, followed by 1 percent increases annually in 2027, 2028 and 2029. The cap will revert to $10,000 in 2030. The deduction phases out for taxpayers with a modified adjusted gross income (MAGI) of $500,000 or more.
4. Personal tax exemptions were permanently eliminated
Who is affected: Anyone who itemizes their tax deductions
What the bill says: The bill referred to as OBBBA permanently eliminates personal exemptions, which had been suspended under TCJA and would have returned in 2026. Coupled with the increased standard deduction, the elimination of personal exemptions in TCJA has led to fewer taxpayers itemizing deductions.
5. The Child Tax Credit amount increased permanently
Who is affected: Taxpayers with qualifying dependents
What the bill says: The Child Tax Credit amount increases permanently to $2,200 per child in 2026, with inflation adjustments going forward.
6. Mortgage and home equity interest deductions increased permanently; new auto loan interest deduction was created
Who is affected: Individuals who are repaying a mortgage, home equity loan or auto loan
What the bill says: The mortgage interest deduction will permanently max out at $750,000, and the TCJA home equity interest deduction rules (home equity must be used for a home improvement or acquisition to deduct the interest) are also made permanent. Individuals taking out loans for new cars can deduct up to $10,000 of new car loan interest per year as long as they meet the requirements. The auto loan interest deduction is for 2025 through 2028.
7. The lifetime gift and estate tax exemption permanently increased.
Who is affected: High-net-worth individuals who have substantial estates
What the bill says: The exemption on estate and gift taxes increases to $15 million for individuals and $30 million for couples starting in 2026. The exemption adjusts for inflation annually starting in 2027.”
I hope this article has been helpful. I’ll post the rest of it next week. Meanwhile, if any of this has you thinking about estate planning, please do not hesitate to call me. I’d be honored to help you. Please call me at 513-399-7526 or visit my website at www.davidlefton.com
Source: LinkedIn, 7/10/25 by Patrick Horning, J.D., C.L.U, CFP for Northwest Mutual