{"id":11842,"date":"2025-07-21T02:02:11","date_gmt":"2025-07-21T02:02:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/11842\/"},"modified":"2025-07-21T02:02:11","modified_gmt":"2025-07-21T02:02:11","slug":"trumps-big-beautiful-bill-includes-these-key-tax-changes-for-2025-what-they-mean-for-you","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/11842\/","title":{"rendered":"Trump’s ‘big, beautiful bill’ includes these key tax changes for 2025 \u2014 what they mean for you"},"content":{"rendered":"

It\u2019s been about two weeks since President Donald Trump<\/a>\u2019s \u201cbig, beautiful bill\u201d became law, and financial advisors<\/a> and tax professionals are still digesting what the sweeping legislation means for clients.<\/p>\n

Meanwhile, several changes are effective for 2025<\/a>, which will impact tax returns<\/a> filed in 2026.<\/p>\n

While the Trump administration has been promoting \u201cworking family tax cuts<\/a>,\u201d the legislation\u2019s impact depends on your unique situation \u2014 and some updates are complex, experts say. <\/p>\n

\u201cThere are just so many moving pieces,\u201d said certified financial planner Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a certified public accountant.<\/p>\n

Currently, many advisors are running projections \u2014 often for multiple years \u2014 to see how the new provisions could impact taxes.<\/p>\n

Without income planning, you could reduce, or even eliminate, various tax benefits for which you are otherwise eligible, experts say.<\/p>\n

When it comes to tax strategy, \u201cyou never want to do anything in a silo,\u201d Guarino said. <\/p>\n

Here are some of the key changes from Trump\u2019s legislation to know for 2025, and how the updates could affect your taxes.<\/p>\n

Trump\u2019s 2017 tax cut extensions<\/p>\n

The Republicans\u2019 marquee law made permanent Trump\u2019s 2017 tax cuts<\/a> \u2014 including lower tax brackets<\/a> and higher standard deductions, among other provisions \u2014 which broadly reduced taxes for Americans.<\/p>\n

Without the extension, most filers could have seen higher taxes in 2026<\/a>, according to a 2024 report from the Tax Foundation. However, the new law enhances Trump\u2019s 2017 cuts, with a few tax breaks that start in 2025:<\/p>\n

The standard deduction increases from $15,000 to $15,750 (single filers) and $30,000 to $31,500 (married filing jointly).There is also a bump for the child tax credit<\/a>, with the maximum benefit going from $2,000 to $2,200 per child.<\/p>\n

If you itemize tax breaks, there is also a temporary higher cap on the state and local tax deduction<\/a>, or SALT. For 2025, the SALT deduction limit is $40,000, up from $10,000.<\/p>\n

The higher SALT benefit phases out, or reduces, for incomes between $500,000 to $600,000, which can create an artificially higher tax rate<\/a> of 45.5% that some experts are calling a \u201cSALT torpedo.\u201d<\/p>\n

This creates a \u201csweet spot\u201d for the SALT deduction between $200,000 and $500,000 of earnings, based on other provisions in the bill, CPA John McCarthy wrote in a blog post<\/a> this week. <\/p>\n

Trump\u2019s new tax changes for 2025<\/p>\n

Trump\u2019s tax and spending bill also introduced some temporary tax breaks, which are effective for 2025. Some of these were floated during his 2024 presidential campaign.These provisions include a $6,000 \u201cbonus\u201d deduction<\/a> for certain older Americans ages 65 and over, which phases out over $75,000 for single filers or $150,000 for married couples filing jointly. <\/p>\n

There are also new deductions for tip income<\/a>, overtime earnings and car loan interest<\/a>, with varying eligibility requirements.<\/p>\n

This chart shows a breakdown of some of the key individual provisions that are effective for 2025 compared to previous law.<\/p>\n

Premium tax credit \u2018subsidy cliff\u2019 returns <\/p>\n

During the pandemic, Congress boosted the premium tax credit<\/a> through 2025, which made Marketplace health insurance more affordable. <\/p>\n

But Trump\u2019s legislation didn\u2019t extend the enhanced tax break, which could raise Affordable Care Act premiums<\/a> for more than 22 million enrollees if no action is taken, according to KFF, a health policy organization.<\/p>\n

That could impact enrollees when choosing ACA health plans this fall, according to Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.<\/p>\n

Starting in 2026, enrollees need to prepare for the ACA subsidy cliff, where enrollees lose the premium tax credit when income exceeds the earnings thresholds by even $1, he said. <\/p>\n

Currently, most ACA enrollees receive at least part of the premium tax credit. However, the subsidy cliff means enrollees lose the benefit once earnings exceed 400% of the federal poverty limit. For 2025, that threshold was $103,280 for a family of three<\/a>, according to The Peterson Center on Healthcare, a nonprofit for healthcare policy, and KFF.<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s been about two weeks since President Donald Trump\u2019s \u201cbig, beautiful bill\u201d became law, and financial advisors and…\n","protected":false},"author":2,"featured_media":11843,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-11842","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/11842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=11842"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/11842\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/11843"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=11842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=11842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=11842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}