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Top 5 Ways the One Big Beautiful Bill Act Benefits Individual Taxpayers in 2025

The One Big Beautiful Bill Act (OBBBA) introduced substantial revisions to the federal tax landscape. While many provisions impact businesses, estates, and specialized sectors, several key components directly affect individuals filing personal returns in 2025. The following five changes represent the most meaningful areas of taxpayer benefit and should be considered in personal tax planning for the upcoming year.

  1. Permanent Lower Tax Rates and Increased Standard Deduction

One of the most significant outcomes of the OBBBA for individual taxpayers is the permanence of the reduced income tax brackets established under the Tax Cuts & Jobs Act. These lower rates were previously scheduled to sunset after 2025, which would have resulted in higher tax liabilities for most filers. Under the new legislation, the reduced brackets—such as 12%, 22%, and 24%—are now permanent.

In addition, the standard deduction—claimed by the majority of U.S. taxpayers—has been permanently preserved and increased for 2025 as follows:

  • $15,750 for single filers
  • $23,625 for heads of household
  • $31,500 for married filing jointly

This change reduces taxable income, simplifies filing for many households, and minimizes the need to itemize deductions.

  1. Enhanced Child Tax Credit and Expanded Eligibility

Families with qualifying children receive increased tax relief beginning in 2025. Key enhancements include:

  • An increase in the nonrefundable Child Tax Credit to $2,200 per child
  • An increase in the refundable amount to $1,700
  • Higher income phase-out thresholds of $200,000 for single filers and $400,000 for joint filers
  • Inflation indexing going forward

These changes allow more families to qualify, reduce phase-out impact on middle-income earners, and provide more meaningful financial support. The $500 credit for other dependents also becomes permanent.

  1. Temporary $6,000 Senior Deduction

For tax years 2025 through 2028, qualifying senior taxpayers may claim an additional $6,000 deduction. Eligibility applies when the taxpayer (and spouse, if filing jointly) is age 65 or older and holds a valid Social Security number. The deduction phases out beginning at:

  • $75,000 MAGI for single filers
  • $150,000 MAGI for joint filers

This provision offers targeted relief for older taxpayers, particularly those on fixed or retirement-based income sources.

  1. New Deductions for Tips and Overtime Compensation

Individuals working in occupations where tips and hourly overtime are common may benefit from two newly introduced deductions:

  • Up to $25,000 in qualified tips may be deductible
  • Up to $12,500 in overtime compensation ($25,000 for joint filers)

These deductions:

  • Are available to both itemizers and non-itemizers
  • Begin to phase out at $150,000 single / $300,000 joint
  • Require joint filing status for married taxpayers

This provision particularly benefits workers in hospitality, food service, personal services, and related fields.

  1. Increased SALT Deduction Cap for 2025

The state and local tax deduction cap increases from $10,000 to $40,000 for 2025, applicable to both single and joint filers. This offers significant relief for taxpayers residing in higher-tax jurisdictions. The allowable deduction phases down between $500,000 and $600,000 of MAGI, but remains advantageous for many homeowners and wage earners.

If you have any questions for your service team or would like to schedule tax planning, please don’t hesistate to reach out to our firm.

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CHRISTINA IMPERIOLI

Supervisor, CPA

Christina Imperioli is a Supervisor at Accavallo & Company, LLC, where she specializes in the preparation and review of individual and business tax returns across a variety of industries. With a focus on accuracy, client service, and technical expertise, she plays a key role in helping clients navigate complex tax matters.

She began her career as a Staff Accountant at The Innovative CPA Group, quickly rising through the ranks to Senior Accountant and ultimately Supervisor, demonstrating a strong commitment to professional growth and leadership.

Christina is a Certified Public Accountant and an active member of both the Connecticut Society of CPAs (CTCPA) and the American Institute of Certified Public Accountants (AICPA). She holds a Bachelor of Business Administration in Financial Accounting from Western Connecticut State University.

Throughout her career, she has worked with clients in the real estate, construction, and retail sectors, bringing valuable insight and industry-specific knowledge to every engagement.

Outside of work, she enjoys traveling with her husband and son, spending time with her three dogs—two rescues named Cole and Indigo, and a Brussels Griffon named Louie—and exploring local bookstores. Christina is a passionate reader and podcast enthusiast, she often listens to new episodes during her daily commute.

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Sherri Fisher is a Tax Manager at Accavallo & Company, LLC.  Sherri has longstanding expertise in Trust and Estate Taxation, Eldercare, and Estate planning. Sherri appreciates the relationships she has built with estate planning attorneys and advisors, to provide a team approach to assisting her clients. Sherri also has seasoned experience in business and individual taxation and is partial to assisting start-ups in developing overall accounting and operating plans.

Prior to joining Accavallo & Company, LLC, Sherri was a manager in a large firm, servicing high net worth trust clients, business, and personal clients. She was also a Partner in a large bookkeeping firm, which specialized in cloud accounting systems for regional and national companies. Sherri led a team in assisting clients to organize their accounting systems.  She is a graduate of Florida Atlantic University with a B.S. degree in Accounting.    

Sherri’s experience includes working with companies and organizations in a variety of industries including:

  • Investment Trusts

  • DAPT and Family Investment Partnerships

  • Estate and Probate Administration

  • E-Commerce

  • Manufacturing

  • Construction

  • Real Estate Investment

  • Marketing and Service-based industries

In addition to her professional accomplishments, Sherri is an Intuit Advanced Pro Advisor, Intuit Future Firm Advisory Board member, member of the Valley WIN Network, and proudly served as past Connecticut Public School liaison for the Yale Tommy Fund for Childhood Cancer. Sherri enjoys time with her family, Cleveland sports, thrifting and gardening.