On July 4, 2025, President Trump signed the sweeping One Big Beautiful Bill Act (OBBBA) into law. The legislation includes a wide range of tax provisions and changes, both permanent and temporary, that could impact you and your family in the months and years ahead.

Below, we’ve highlighted some of the key tax provisions impacting individuals.

Permanent Extensions of Tax Cuts and Jobs Act Provisions

Some of the more newsworthy elements of the OBBBA relate to permanent extensions of provisions in the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire after Dec. 31, 2025. Many of these changes could mean lower overall tax bills for many households and provide more certainty with long-term wealth planning. Changes include: 

• Lower income tax brackets. The TCJA had decreased the seven income tax brackets, and that change was permanently extended by the OBBBA.
• An increased standard deduction. The standard deduction was doubled in 2017 by the TCJA, and the OBBBA made that change permanent while increasing the 2025 amount to $15,750 for single filers (from $14,600 in 2024) and $31,500 for joint filers (from $29,200 in 2024).
• An increased non-refundable child tax credit. The OBBBA extended and increased this credit to $2,200 per child for 2025, an increase of $200 from the 2024 level.
• Increased gift, estate and generation-skipping transfer (GST) tax exemptions. The OBBBA made this TCJA change permanent and increased the unified gift and estate tax exemption amount and the GST tax exemption amount to $15 million per individual ($30 million for married couples) starting in 2026. Had Congress not acted by the end of 2025, the unified gift and estate tax exemption and the GST tax exemption would have reverted to pre-2017 levels of nearly half the current amount.
• State and local tax (SALT) deduction cap. Beginning in 2025, this deduction was increased by the OBBBA from $10,000 to $40,000 per household; it begins to phase out for taxpayers with modified adjusted gross income over $500,000 and is fully phased out for taxpayers with incomes over $600,000. The SALT deduction cap reverts to $10,000 starting in 2030.
   

Temporary Individual Provisions

The OBBBA also included several notable temporary changes to provide short-term tax relief for individual taxpayers. These changes start in 2025 and run through 2028, and include: 

• No taxes on tips and overtime: The OBBBA capped deductions on tipped income up to $25,000 and for overtime pay up to $12,500 per individual, subject to income and occupation limitations.
• Enhanced deduction for seniors: Seniors age 65 and older can benefit from a new $6,000 deduction, which begins to phase out at incomes of $75,000 for single filers and $150,000 for joint filers and is fully phased out with incomes of $175,000 and $250,000, respectively. This is on top of a current senior deduction of $2,000 for single filers and $3,200 for married couples.
• New car loan interest deduction: Taxpayers can deduct up to $10,000 of loan interest for new cars assembled in the U.S., subject to income limitations.
   

Other Permanent Provisions 

• New charitable deduction for non-itemizers: The OBBBA added an above-the-line deduction for charitable contributions beginning in 2026 ($1,000 for single filers, $2,000 for joint filers).
• Home mortgage interest and insurance premiums: The $750,000 limit on the treatment of mortgage insurance premiums as qualified residence interest is made permanent. The exclusion of home-equity indebtedness from the definition of qualified residence interest is also now permanent.
• Deductions and credits: Several other deductions and credits, including the adoption credit, employer-provided childcare credit, paid family and medical leave credit, and education-related benefits are made permanent.
   

These are just a few of the many provisions in the OBBBA that could affect your financial situation. Because the OBBBA is so broad, be sure to contact your wealth advisor to discuss potential impacts in more detail. Your wealth advisor will work with you and your tax and legal advisors to help you address the changes impacting you and incorporate appropriate strategies into your estate and tax plans.

This article has been written for the general information of clients and friends of Bell Bank. It is not intended, nor may it be relied upon, as tax or legal advice with respect to any matter. It also cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by the Internal Revenue Service or other taxing authorities.