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2025 Tax Changes Under the “One Big Beautiful Bill"

Starting with the 2025 tax year, the One Big Beautiful Bill Act (OBBBA) made some of the biggest changes to the tax code since 2017. These changes affect working families, homeowners, seniors, and small business owners,  especially here in high-tax states like New York.  

 

At Express Tax Professionals, we break down the new rules in plain English so you can understand what really changed, who it helps, and how to plan ahead.

New York tax preparation

Key 2025 Tax Changes at a Glance​​​

  • Higher standard deduction for all filing statuses

  • New extra deduction for seniors age 65+  

  • Bigger SALT deduction cap for state & local taxes (helpful in NY)  

  • New temporary deductions tied to tips and overtime (2025–2028)  

  • Increased Child Tax Credit for many families

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​Standard Deduction & Tax Rates​​

For 2025, the standard deduction went up again under the Bill:  

 

  • Single / Married Filing Separately: $15,750

  • Married Filing Jointly / Surviving Spouse: $31,500

  • Head of Household: $23,625

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The law also locks in the lower individual tax rate brackets that came from the 2017 Tax Cuts and Jobs Act, instead of letting them revert to higher pre-2017 levels.  

 

What this means for you:

If you take the standard deduction, your taxable income is reduced more than in 2024, which may lower your tax bill compared to what it would’ve been without the new law.

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Extra Deduction for Seniors (Age 65+)

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Beginning with 2025 returns, seniors get an additional standard deduction “bonus” on top of the regular standard deduction. Several sources describe a new $6,000 extra deduction for single seniors (and $12,000 for married filing jointly) on top of their base standard deduction, with phaseouts at higher incomes.  

 

Who this helps:

 

  • Seniors living on fixed income

  • Retirees with pensions, Social Security, or part-time work

  • Older homeowners with property tax + medical expenses

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Planning tip:

If you’re close to the income thresholds where the senior benefit phases out, we can look at strategies like retirement account contributions or timing of income to keep you eligible.

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 SALT (State & Local Tax) Deduction Cap – Big News for NY

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The law temporarily increases the SALT deduction cap (state & local income + property taxes) starting in 2025:  

 

  • Old cap: $10,000

  • New cap: $40,000 for most filers (with a lower cap for married filing separately and phase-downs for higher incomes).

  • The higher cap is temporary (2025–2029) and reverts to $10,000 in 2030.

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What this means for New Yorkers:

 

  • If you own a home in NY and pay high property + state income taxes, you may now benefit from itemizing instead of taking the standard deduction.

  • The right choice (itemize vs standard) is no longer obvious,  it’s case-by-case.

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 If you’re a homeowner in Queens, Brooklyn, The Bronx,  Manhattan,  Staten Island or Long Island, this one change alone can significantly affect your 2025 refund or balance due.
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“No Tax on Tips” & Overtime Deductions (2025–2028)

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The Bill doesn’t literally erase tax on tips and overtime,  instead, it creates new,  large deductions you can claim for qualifying tip and overtime income from 2025 through 2028.  

 

Tipped workers (for example):

  • Certain workers can deduct up to $25,000 of qualified tip income per year (with income limits and phaseouts).

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Overtime workers:

  • You may deduct the “extra half” portion of overtime pay (the premium above your regular rate), up to a capped amount (often cited around $12,500 per person / $25,000 per couple).

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What this means for you:

  • This is huge for restaurant workers, bartenders, nail techs, salon staff, gig workers, and other service workers.

  • It’s also important for nurses, warehouse staff, and other hourly workers regularly working overtime.

 

 

Important warning:

The IRS has already emphasized that misreporting tip or overtime income can backfire and lead to penalties,  you still must report it correctly, then claim the deduction the right way.

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 Child Tax Credit & Family Changes

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The Bill increases the Child Tax Credit for many families beginning in 2025:

  • Credit increases from $2,000 to about $2,200 per qualifying child, with inflation adjustments in later years.  

  • Phase-out thresholds around $200,000 single / $400,000 married filing jointly stay in place.  

 

 

There are also changes to adoption, child-care credits, and new “Trump accounts” for newborns in some situations, but those are less common and more specialized. 

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Small Businesses, LLCs & Self-Employed

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The Bill generally extends or stabilizes many of the 2017 small-business tax provisions, such as the Qualified Business Income (QBI) deduction, with some tweaks.  

 

For LLCs, contractors, landlords, and other pass-through businesses, this can affect:

  • Your QBI deduction (up to 20% of qualified income)

  • How you strategize W-2 wages vs 1099 vs distributions

  • Whether it makes sense to change entity type or restructure

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Big tax changes create new opportunities, and new ways to accidentally leave money on the table.

 

At Express Tax Professionals, we help:

  • New York homeowners decide whether to itemize under the higher SALT cap

  • Seniors plan around the extra deduction and income thresholds

  • Tipped and overtime workers correctly calculate and claim their new deductions

  • Small business owners and LLCs update their tax strategy under the new rules

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Disclaimer

Disclaimer: This page is for general informational purposes only and reflects our understanding of the One Big Beautiful Bill Act as of the current date. Tax law is complex and may change, and its impact on you depends on your specific situation. This is not legal or tax advice. Please consult with a qualified tax professional before making decisions based on this information.

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Express Tax Professionals

Your Rights as a Tax Client in New York State & New York City

 
As a tax client in New York, you are entitled to:
  • A written estimate of all fees before we begin preparing your return.
  • A copy of every tax return we prepare for you.
  • A tax preparer who signs your return and includes their identifying information as required by law.
  • A receipt showing how to contact us during the year.
  • The return of your original records upon request.

 

 
If you are not working with a CPA or an attorney, New York City also requires that we clearly disclose our qualifications.
 
Qualifications:
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Our preparers are experienced tax professionals and registered New York State tax return preparers. We are not a CPA firm or law firm, and we do not provide legal representation. In audit or legal matters, we will refer you to a licensed attorney or CPA as needed.

Any U.S. federal tax information contained on this website is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing, or recommending any transaction or matter to another party.

Express Tax Professionals complies with all IRS Circular 230 standards and New York State tax preparer requirements. Our preparers are properly registered and authorized to prepare federal and New York State tax returns for a fee. Information on this website is general in nature and not legal or tax advice. 

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