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So Glad you asked. Lowered tax rates. No tax rates on tips and overtime if properly reported (and the matching deduction is taken). The 47 page tax summary has been pared down to three pages for “inquiring minds.”

Spoiler alert! Energy tax credits (Home and Vehicle) are getting the AX-expire December 31, 2025. If the home needs insulation, windows or doors get it done before December 31, 2025 to get the 2025 tax credit. Provisions affecting most individuals:

FIRST: Filling the “Tax Cookie Jar”:

1. Permanently extending lower tax rates. Prevents the additional 3% tax increase on the 12%, 22, 24% brackets. Lowers the maximum tax rate to 37%. Extends the 10, 12, 22,24 32, 35 and 37% rates permanently
2. Increased standard deduction from the 2017 Tax Cuts and Jobs Act PERMANENT. For tax years 2025-2028 adds to the standard deduction:

$1,000 for single

1,500 for head of household and

2,000 for Joint filers.

2. For 2025 Child tax credit is $2,000 per child under age 17 and $500 per dependent for all others. After tax year 2026 Child Tax Credit will be indexed (increased) for inflation.
3. Qualified Business Income deduction (20% of net profits for Sole Proprietorship, Partnerships and limited other business entities) made permanent
4. Lifetime Gift/Estate exemption permanently extended $15 Million single, 30 Million Married Joint filers
5. Alternative minimum tax exemption made permanent (lower taxes on higher income earners)
6. Maximum home mortgage interest deduction limited to interest on $750,000 of debt.
7. ABLE Accounts (Achieving a Better Life Experience Accounts—disabled beneficiaries) Contribution amounts indexed for inflation. Beneficiaries making contributions to their own account can qualify for Saver’s credit in some instances. Education savings account balances (e.g. 529 Plans) can be rolled over to ABLE account tax free.
8. Student loans. Cancellation of debt income PERMANENTLY excluded from income if student is permanently disabled or dies.
9. Tips—CAREFUL. Tips must be reported on tax return. Deduction equal to the Tips reported subtracts it=no tax on tips. If no reporting, IRS could bill. Report & deduct!
10. No Tax on Overtime pay CAREFUL—Tax years 2025—2028 ONLY. Again same as in tips. Its only non taxable if its reported AND take the tax deduction.
11. Seniors (age 65+) extra special deduction of $4,000 per filer IF income below 75,000 single or 150,000 filing joint. CAREFUL tax years 2025-2028 only!
12. Car loan interest deduction. No itemization/long form required! Deduct up to $10,000 if adjusted gross income is under $100,000 single or $200,000 joint and if Vehicle assembled in US. Includes car, minivan, sport utility vehicle, truck or motorcycle..
13. New Tax Credit: 2025 for charitable contributions to 501c3s providing scholarships to elementary and secondary school students (e.g. school choice programs)
14. Expanded use of 529 Tax Education accounts. Use for elementary and secondary school and/or home school expenses, and recognized/qualified credentialing expenses
15. Charitable deduction for NON ITEMIZERS. $150 single, $300 for married filing Jointly for tax years 2025-2028. This deduction should be on the FIRST PAGE of the return. No need to itemize.
    
16. NEW Money Accounts for Growth & Advancement (MAGA) “Kiddie” Savings Accounts:

     

For child under age 8 (as of Jan 1, 2026). Opened by parents

Maximum Contribution is $5,000 a year (for most), Invested in the stock market

No contributions after beneficiary is 18, No distributions UNTIL beneficiary is 18

Beneficiaries access up to 50% of account for college, training programs or small business loans until age 25. Access full balance at age 30.

Distributions are TAXABLE!

US government to deposit $1,000 into each established MAGA account for:

Newborns born between Jan 1 2024-December 31, 2028 AND

if Account is properly set up by parents AND

If account has child’s ssn on account AND

if child is a US citizen.

18. Health Savings Account participants expanded. Now allowed:

     

if Age 65+ and working or

If Have Marketplace insurance plan and/or Flexspend Benefits.

To Use Health Savings account to pay for direct primary care if service fee is less than $150 single or $300 married filing joint per month.

To Use for Fitness membership programs up to $500/yr single or $1,000 joint

Jointly filing spouses can make HSA contributions to the same account.

Increased Contributions (up to additional 4,300) when taxable income less than 75,000 annually (single) or 150,000 joint.

18. Business owners 100% bonus depreciation for equipment purchases from January 20, 2025 – December 31, 2030
19. Relaxing 1099K (merchants selling on EBay, Etsy etc) Form reporting threshold to $20,000 or 200 transactions.
20. Relaxing 1099NEC/MISC reporting threshold to $2,000 after December 31, 2024 indexed for inflation (translation: if pay someone under $2,000 in the course of business don’t have to file a 1099, but money received is still taxable . . .act wisely)
21. Partial loan interest exclusion for Agricultural Real Estate (e. g. Farms)
22. State and local taxes paid deduction (itemizer/long form) limit increased to $30,000
23. Tax filing and payment requirements do not apply to hostage or wrongfully detained persons. Prevents lost refunds or large tax bills for victimized persons.
24. Tax preparers may charge a contingency fee for tax returns and on any aspect of return preparation, refunds or documentation.

Smaller “Tax Cookies” for:

26. Casualty Loss deduction (e.g. fire, tornado) permanently limited to personal casualty losses in a federally declared disaster zone
27. Miscellaneous itemized deduction (only for itemizers) permanently eliminated.
28. Larger Itemized deductions allowed. Cap only applies to taxpayers in the 35% tax rate
29. Moving expense deduction only allowed to active duty armed forces.
30. Gambling losses and expenses. PERMANENTLY Limited to extent of wagering winnings (translation: Can’t claim gambling losses unless a professional gambler).

     

Uncle Sam Breaks “Tax Cookie/Benefit Jar” on:

31. Energy credits: Clean Energy Vehicle Tax credit and Home Energy Tax Credit programs expire December 31, 2025
32. Illegal aliens: No healthcare or “premium” tax credit. No Medicare benefits
33. Potential Fraud: Valid Social Security Number required for College tax credits. Terrorists don’t qualify for tax exempt status (duh!), Health Care exchange (Healthcare.gov) must annually verify Taxpayers qualify to receive credits or premium discounts. No health insurance premium discount if enroll during a special income related enrollment period (No double dipping!). Medicare payments audited to target over payments and improper payments (fraud, mistakes and double billing) Earned income credit reform: system to detect duplicate Earned Income Credit claims for same child, correct duplicate claims. Increased penalties for unauthorized disclosure of taxpayer information. Maximum fine increased from $5,000 to $250,000 per incident. Please be kind to your tax preparer! Don’t ask!
34. Government expansion: Direct Tax Filing with IRS program terminated.

And Before we get too enamored by all the “tax cookies” in this Law, remember Congress has raised the debt ceiling to pay for it. The law of unintended consequences applies. Be careful what you wish for. . . .

Best