The budget bill signed by President Trump on July 4 solidifies various tax changes initiated by the Tax Cuts and Jobs Act of 2017. It ensures that many tax cuts now remain permanent, including a reduction in the top tax rate from 39.6% to 37%. The bill also addresses standard deductions, which are increased and made permanent for future tax years. For 2025, single filers' standard deduction rises to $15,750, married filing jointly to $31,500, and heads of household to $23,625, reversing earlier expiration plans.
The sprawling budget bill signed into law by President Trump includes many significant changes for consumers and the economy, especially regarding taxes. This bill extends provisions from the Tax Cuts and Jobs Act of 2017, making many tax cuts permanent.
The clock was ticking on the 2017 changes, which were set to revert to higher rates in 2025. The new bill ensures these changes are now permanent, including a lowered top rate for high earners.
The new bill makes increases in the standard deduction permanent and raises them again for the tax year 2025, establishing higher thresholds for single and married filers.
New standard deduction levels are established for single filers and married filing separately at $15,750, married filing jointly at $31,500, and heads of household at $23,625, a significant increase from prior levels.
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