Earlier this year H.R. 1, also referred to as the One Big Beautiful Bill Act, was signed into law. This legislation made some provisions from 2017’s Tax Cuts and Jobs Act permanent and added other new short- and-long-term tax rules. Below is a brief summary of the provisions that might broadly affect FPPA Members.

Extending Provisions Already in Effect

• Tax brackets: H.R. 1 permanently extends the 10%, 12%, 22%, 24%, 35%, and 37% tax rates
• Standard deduction: In 2025, most taxpayers will continue to use the elevated standard deduction of $15,750 for individuals and $31,500 for couples filing jointly in 2025. These amounts will be indexed for inflation beginning in 2026
• Increased Child Tax Credit: The law slightly increases the existing Child Tax Credit to $2,200 in 2025, which will be adjusted for inflation going forward
• Other Dependent Credit: The $500 credit for families with non-child dependents, such as parents or adult relatives, has been made permanent

New Annual Deductions (All Effective From 2025 through 2028)

• “No Tax on Tips”: Certain taxpayers may deduct up to $25,000 per year in qualified tips
• “No Tax on Overtime”: Certain workers may claim a deduction on qualified overtime up to $12,500 for individuals and $25,000 for joint filers
• “No Tax on Car Loan Interest”: Individuals may deduct up to $10,000 of loan interest paid on a qualified vehicle whose final assembly took place in the United States
• Deduction for Seniors: Qualified individuals age 65 and older may deduct an additional $6,000 each ($12,000 for couples filing jointly) beyond the standard deduction amount

Additional Rule Changes Coming in 2026

Finally, the law makes several tax and program changes effective in the 2026 filing year, including expanded child and dependent care credits, new savings options for children, education tax benefits, and more.

The list above is not exhaustive. Please consult the IRS or a tax professional for more information