16 of the Biggest Tax Changes
- Wilma Eichler
- 6 days ago
- 3 min read
Here is a summary of many of the biggest changes in our taxes, although not all are represented. You can read more here:
1. Raising the Standard Deduction- an increase of $1,000 for single filers to make it $15,750 for single filers and a $2,000 increase for married filing jointly which makes $31,500 for them.
2. Limitation on Itemized Deductions- limits itemized deduction at 35% for those at 37% rate.
3. Adoption Credit- $17,280 credit with up to $5,000 refundable.
4. End of the Electric Vehicle Credit -after Sept. 30, 2025.
5. Child Tax Credit- is made permanent with an increased maximum of $2,200 in 2026, inflation adjusted thereafter.
6. Health Savings Accounts (HSAs) and education savings plans expanding their uses.
7. New Tax Credit for Donations to Scholarship-granting organizations.
8. Bonus Depreciation– Has been restored back to 100% beginning January 20th, 2025 purchases before are at 40%.
9. Estate Tax- increases the exemption estate tax to $15 million, gift tax limit is $19K.
10. Charitable Donations- for those that don’t Itemize: A permanent above-the-line deduction for charitable donations of $1,000 per filer who takes the standard deduction. Also for those that do itemize there will now be a new .5% floor on the deduction of charity (much like Medical). You will need to subtract 0.5 percent of adjusted gross income (AGI) from your total donations, both provisions begin in tax year 2026.
TEMPORARY CHANGES: 2025-2028
11. Senior Bonus- deduction of $6,000 on top of $2000 enhanced deduction for those 65+, which means the first $23,750 will not be taxed for singles, $46,700 for married, income limited to $75K.
12. No taxes on Tips Up to $25K deduction for those that earn & report tips and make under $150K.
13. No taxes Overtime Up to $12.5K deduction for the premium part of overtime, for those that make under 150K.
14. Deductible Car loan Interest for cars purchased in 2025 made in the United States of America.
15. State and Local Tax Deduction Limitation (SALT cap): the maximum SALT deduction was increased to $40,000 instead of $10,000.
16. Trump Accounts: Savings Account for newborns where the government will contribute $1,000 to this account for each born between Dec. 1, 2025, and Dec. 31, 2028.
What Would Have Been…
The provisions from the Tax Cut & Job Act were due to expire on Dec 31st, 2025. Had the Big Beautiful Bill not passed, making many of these provisions permanent, this is what would have happened, and our tax returns would look totally different:
Bonus Depreciation was going to continue to phase out at 40% in 2025, 20% in 2026 and 0% in 2027 but instead has been restored to 100%
Standard Deduction: The standard deduction for 2026 or single would have been $8300, for married filing jointly it would be approximately $16,600, and the personal exemption would have been $5,275.
Capital Gains Preferential 20% Limit would have gone away and those rates would have jumped up to ordinary income. Ordinary income tax limits were also scheduled to bump up to 39.6% instead of the 37% that was restored and made permanent.
Child Tax Credit: Would have decreased from $2,000 back to $1,000.
Deduction for Small Business Income: The Qualified Income Deduction of 20% deduction for pass-through income (section 199A) for sole proprietorships, partnerships, and S-corporations would have gone away.
Estate Taxes: The TCJA doubled the estate tax exemption. If this provision had passed the exemption would have expired.
IRS reports that paper checks are 16 times more likely to be compromised. In an effort to minimize fraud, the IRS will no longer accept paper checks nor will they issue paper refund checks starting now. Electronic Fund Transfers will be required for both payments and refunds.
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