As we approach the 2025 tax year, major shifts are coming under what's being called "The One Big Beautiful Bill" (OBBB). This legislation marks one of the most sweeping updates to the tax code since the Tax Cuts and Jobs Act (TCJA) of 2017, and many key provisions of TCJA are set to sunset after December 31, 2025.

Below is a side-by-side look at how these changes may affect your deductions, credits, and long-term financial planning.

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Standard & Itemized Deductions

Category	Pre-OBBB (TCJA Sunset)	Post-OBBB (Current Law)
Standard Deduction	Single – $15,000 · MFJ – $30,000	Single – $15,750 · MFJ – $31,500
State & Local Taxes (SALT)	$10,000 cap	$40,000 cap
Mortgage Interest	Deductible on up to $750,000 of acquisition debt	Same Private Mortgage Insurance (PMI)
Charitable Donations	No AGI floor	Subject to 0.5% AGI floor
Pease Limitations	Returning 1/1/2026	Uniform 2% limitation (capped at 35%)

Family & Dependent Credits

Credit	Pre-OBBB (TCJA Sunset)	Post-OBBB (Current Law)
Child Tax Credit	$2,000 ($1,700 refundable portion)	$2,200 (inflation-adjusted) · $1,700 refundable (permanent)
Child & Dependent Care Credit	20–35% of qualified expenses · $5,000 FSA limit	20–50% of qualified expenses · $7,500 FSA limit²
Adoption Tax Credit	$17,280 (non-refundable)	$17,280 ($5,000 refundable + inflation-adjusted)
Premium Tax Credit (Health Insurance)	Eligible if MAGI within 100–400% of FPL	Eligibility extended in some cases beyond 400%

Income-Driven Repayment (IDR) Plans for Federal Student Loans

Plan Type	Pre-OBBB (TCJA Sunset)	Post-OBBB (Current Law)
SAVE / REPAYE	Available (PFH applies to loan)	Eliminated
PAYE / ICR	Available	Phased out by 7/1/2028
IBR	Available	Available (no PFH needed)
RAP (Repayment Assistance Plan)	N/A	Available starting 7/1/2026

These changes will significantly reshape how borrowers manage student debt repayment and forgiveness timelines, especially those using the SAVE or PAYE programs.

Business Owners & High-Income Taxpayers

Provision	Pre-OBBB (TCJA Sunset)	Post-OBBB (Current Law)
Alternative Minimum Tax (AMT)	Exemption $88,100 (MFJ) · Rate 28% over $239,100	Exemption $88,100 (MFJ) · Phaseout starts at $626,350 · 25% rate
Section 199A (QBI Deduction)	20% deduction (through 12/31/2025)	20% deduction permanent · Min deduction $400 (Single) / $800 (MFJ)
Bonus Depreciation (§168)	40% (purchases in 2025, expiring 2027)	100% (permanent starting 1/19/2025)
Estate & Gift Tax Exemption	$13.99 million (dropping 2026)	$15 million (permanent)

 

What This Means for You

These provisions could reshape your tax strategy—from how you structure charitable giving and business deductions to how you manage student loans, estate planning, and future Roth conversions.

Some taxpayers will benefit from increased deduction limits and new credits, while others may see prior benefits sunset at the end of 2025.

 

Disclosure: 

This article is based on current tax laws and rules as of 2025, which are subject to change. While every effort has been made to ensure the accuracy of information, neither Index Fund Advisors, Inc. nor its representatives take responsibility for errors or omissions.

This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, service, or considered to be personalized tax advice.  This material is provided for informational purposes only. IFA Taxes is a division of Index Fund Advisors, Inc., which provides tax-related guidance as part of its investment advisory services. Clients, prospective clients, and readers of this article should consult with their tax advisor before making any tax-related decisions. Tax laws are subject to change, and the information presented herein reflects our understanding as of the date of publication. Future legislative or regulatory developments may affect the accuracy or applicability of the information provided.   Investors are encouraged to consult with a qualified advisor to assess personal financial goals and risk capacity. Additional information is available by reviewing IFA's ADV Brochure at https://www.adviserinfo.sec.gov/ or visiting www.ifa.com.