Many Taxpayers Will Need Help This Tax Season Due to New Tax Act
Posted by Dustin Horton // January 23, 2026 // Local Business
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As taxpayers organize tax documents for the 2025 tax year, significant changes in place for both individuals and businesses. These changes stem from inflation adjustments and new provisions under the One Big Beautiful Bill Act (OBBBA) that was signed into law on July 4th. Here are a few highlights:
For Individuals:
- Higher Standard Deductions: Singles can claim $15,750, Heads of Household $23,625, and Married Filing Jointly $31,500.
- Tax Brackets Adjusted: Taxable income within each of the federal 10%, 12%, 22%, 24%, 32%, 35% and 37% tax brackets have been expanded.
- New Deductions: Workers can deduct up to $25,000 in tips, $12,500 in overtime pay (or $25,000 for joint filers), and $10,000 in car loan interest for qualifying vehicles. Seniors 65+ receive an extra $6,000 deduction. These deductions phaseout at certain income limits.
- Expanded SALT Cap: State and local tax (SALT) deductions increase to $40,000 for joint filers, with income-based phase-outs.
- Credits Updated: Child Tax Credit rises to $2,200 per child under 17. Adoption credit jumps to $17,280. Clean energy credits for EVs and home improvements expired after September 2025.
For Businesses:
- Section 179 Deduction: Increased to $2.5 million, with phase-outs starting at $4 million.
- Bonus Depreciation: 100% deduction reinstated permanently for qualifying property. Just be aware that New York State does not allow bonus depreciation.
- QBI Deduction: The up to 20% pass-through deduction remains in place.
- Interest Expense Rules: Adjusted to allow more flexibility for larger businesses.
These are just a few of the changes in tax law that create opportunities for many individuals and small businesses to save on their income taxes. The OBBBA Tax Act has even more changes for 2026 through 2028 tax years. Check our website at EquusCPA.com for more information.
