Here’s what HIVE AI had to say about “How did the One Big Beautiful Bill Act (OBBBA) change individual tax rules starting with 2025 returns filed in 2026?”:
Changes that start with tax year 2025 (returns generally filed in 2026)
1) TCJA individual rate structure made permanent (starting in 2025 and beyond)
The Act made permanent the individual tax rate tables that had been scheduled to expire after 2025: the seven ordinary income rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37% continue. 1
2) Higher 2025 standard deduction amounts (as modified by the Act)
For tax year 2025, the standard deduction amounts were raised to:
- $31,500 for married filing jointly
- $15,750 for single and married filing separately
- $23,625 for head of household 5
3) Child Tax Credit (CTC) expansion made permanent
The Act amended IRC section 24 to make permanent the increased/expanded Child Tax Credit rules that previously applied for 2018–2025 under the TCJA. 1
4) SALT itemized deduction cap increased for 2025 (with a high-income phasedown)
For tax years beginning in calendar year 2025, the state and local tax (SALT) itemized deduction limitation amount is $40,000 (half for married filing separately), with a phasedown based on modified AGI above $500,000 (half for MFS), but not below $10,000. This change applies to taxable years beginning after December 31, 2024 (so it applies on 2025 returns). 2
5) New “no tax on tips” and “no tax on overtime” deductions for 2025
The Act added new deductions for qualified tips and qualified overtime compensation beginning in tax year 2025 (with IRS guidance explaining how taxpayers substantiate/compute the deductions for 2025 even though 2025 Forms W-2/1099 weren’t changed to separately report them). 3 6
6) New additional “senior” deduction (age 65+) effective for 2025–2028
Beginning in 2025, individuals age 65 or older can claim an additional $6,000 deduction (on top of the existing additional standard deduction), with a phaseout starting above modified AGI $75,000 ($150,000 MFJ). 7
7) Adoption credit: refundable component introduced (up to $5,000)
The Act added a rule treating up to $5,000 of the adoption credit as refundable (with inflation adjustment beginning after 2025). 1
8) Qualified Small Business Stock (QSBS) exclusion expanded (effective after enactment)
The Act changed QSBS rules (IRC section 1202), including shortening the holding period for certain stock (generally “at least 3 years” for stock acquired after the “applicable date,” while retaining “more than 5 years” for certain stock acquired on or before that date) and increasing the per-issuer dollar limitation for certain later-acquired stock to $15,000,000. 4
If you tell me which of these you’re asking about (for example, SALT cap, tips/overtime, senior deduction, CTC), I can narrow the explanation to how it changes the numbers you’d actually put on a 2025 Form 1040.
Sources
1 – Rev. Proc. 2025-32 📄 Summarize
2 – One Big Beautiful Bill Act Sec. 70120. Limitation on individual deductions for certain state and local taxes, etc 📄 Summarize
3 – Notice 2025-69 📄 Summarize
4 – One Big Beautiful Bill Act Sec. 70431. Expansion of qualified small business stock gain exclusion 📄 Summarize
5 – One, Big, Beautiful Bill provisions
6 – Treasury, IRS provide guidance for individuals who received tips or overtime during tax year 2025
7 – One Big Beautiful Bill Act: Tax deductions for working Americans and seniors
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