The One Big Beautiful Bill Act changes the tax filing process for Americans from 2025. It raises the standard deduction to $15,750 for single taxpayers, $23,625 for heads of household, and $31,500 for joint filers, tracking inflation going forward. The act also increases the SALT cap from $10,000 to $40,000 for those itemizing deductions, with phase-outs commencing for higher income earners. Additionally, it introduces new deductions for eligible workers, allowing deductions for tips and overtime pay, targeted at low- and middle-income earners, which also phase out at specified income thresholds.
The One Big Beautiful Bill Act will radically transform the way Americans file their taxes starting in the 2025 tax year, introducing expanded deductions and new benefits.
The increase in the standard deduction will be $15,750 for single taxpayers, $23,625 for heads of household, and $31,500 for those filing jointly, with adjustments for inflation.
The SALT cap will temporarily raise deductions from $10,000 to $40,000 in 2025, benefiting taxpayers in high-tax states, with phase-outs based on income.
New provisions will allow eligible workers to deduct up to $25,000 in annual tips and up to $12,500 in overtime pay, phased out at certain income levels.
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