One Big Beautiful Bill Act - some key changes that will impact the 2025 tax year and forward for most tax payers

💰 Current tax rates & tax brackets established with TCJA in 2017 are made permanent (10%, 12%, 22%, 24%, 32%, 35%, and 37%)

💰Standard Deduction amounts are permanently increased for 2025 and will be adjusted for inflation going forward. 2025 amounts are $15,750 for singles and $31,500 for MFJ.

💰SALT Deduction Cap is temporarily increased from $10,000 to $40,000 for years 2025-2029.

💰Deductions for Tips and Overtime Pay are available as a temporary deduction for qualified tip income & qualified overtime pay for tax years 2025-2028. Taxpayers still have to pay Social Security and Medicare tax.

💰Senior deduction of $6,000 is available for tax payers aged 65 or older for tax years 2025-2028.

💰The federal Estate, Gift and Generation-Skipping Transfer Tax exemptions are increased to $15 million per person ($30 million for married couples), plus inflation adjustments.

💰Child Tax Credit is also permanently increased to $2,200 per qualifying child starting 2025.

💰A new temporary car loan interest deduction up to $10,000 for vehicles if the final assembly occured in the United States.

💰Donations beginning in 2026, taxpayers who do not itemize deductions are allowed a charitable contribution deduction of up to $1,000 ($2,000 for MFJ)

💰Trump Accounts are available with a one time government deposit of $1,000 for qualifying children born between December 31, 2024 and January 1, 2029

💰100% Bonus Depreciation for certain qualified property acquired after January 19th, 2025 is permanently restored. The bill also permanently restores immediate expensing of domestic research or experimental expenditures from 2025.

💰Section 179 annual expense limit is increased to $2.5 million, reduced by expenditures for section 179 property that exceed $4 million.

💰Miscellaneous Itemized Deductions and Personal Exemptions are permanently eliminated.

💰The FICA tip credit for employers is now expanded to include those in the beauty services in addition to food & beverage industries.

💰Permanently extends Opportunity Zone tax benefits. Qualified Opportunity Zones will now be redesignated every 10 years beginning in 2026. Deferred gain on investments made after January 1, 2027, will be recognized on the earlier of five years or disposition of the investment. A 10% basis increase is allowed if held for five years. No tax is imposed on investment gains if the qualified investment is held for at least 10 years and up to 30 years. 

See link from IRS Publication 15T below for 2025 tax brackets. The full tax brackets are listed on page 11.

2025 IRS TAX BRACKET

The IRS has announced higher federal income tax brackets and standard deductions for 2024. Federal income brackets show how much you’ll owe on each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income. The standard deduction will increase in 2024, rising to $29,200 for married couples filing jointly, up from $27,700 in 2023. Single filers may claim $14,600, an increase from $13,850. There are various other updates to and tax savings available in 2024. Contact us for a thorough tax planning to make sure you are getting maximum tax savings in 2024.

MARGINAL TAX BRACKETS FOR 2024

Single

If taxable income is $0 to $11,600: 10% of the taxable income

If taxable income is $11,601 to $47,150: $1,160 Plus 12% of amount over $11,600

If taxable income is $47,151 to $100,525: $5,426 Plus 22% of amount over $47,150

If taxable income is $100,526 to $191,950: $17,168.50 Plus 24% of amount over $100,525

If taxable income is $191,951 to $243,725: $39,110.50 Plus 32% of amount over $191,150

If taxable income is $243,726 to $609,350: $55,678.50 Plus 35% of amount over $243,725

If taxable income is $609,351 or more: $183,647.25 Plus 37% of the amount over $609,350

Married Filing Jointly

If taxable income is $0 to $23,200: 10% of the taxable income

If taxable income is $23,201 to $94,300: $2,320 Plus 12% of the amount over $23,200

If taxable income is $94,301 to $201,050: $10,852 Plus 22% of amount over $94,300

If taxable income is $201,051 to $383,900: $34,337 Plus 24% of amount over $201,050

If taxable income is $383,901 to $487,450: $78,221 Plus 32% of amount over $383,900

If taxable income is $487,451 to $731,200: $111,357 Plus 35% of amount over $487,450

If taxable income is $731,201 or more: $196,669.50 Plus 37% of the amount over $731,200

Find more info at the IRS website link below:

2024 IRS Inflation Adjustments

Below are some useful calculators we picked that may be helpful:

Federal Income Tax Calculator

Paycheck Calculator

401K Calculator

Personal Cash Flow Calculator

Monthly Budget Calculator

Mortgage Amortization Schedule

Auto Loan Calculator

Visit this links for various payment and filing websites that are commonly needed:

IRS Tax Payment

CO Estimated Payment

CO Revenue Online

CO Unemployment

Colorado Springs Sales Tax