Filing your 2025 tax return in early 2026 will look different from prior years because the One Big Beautiful Bill Act (OBBBA) rewrote large parts of the tax code, locking in several Tax Cuts and Jobs Act provisions while adding fresh deductions for seniors, tipped workers, and parents. Knowing what changed can help you claim a bigger refund.
What the New Law Actually Changes
The OBBBA touches nearly every type of filer, but a handful of groups will notice the biggest shifts: retirees, parents of young kids, small business owners, homeowners, and anyone who earns tips or overtime. Some of these changes are brand new for 2025. Others simply make permanent what was already in place under the 2017 tax law, which had been set to expire.
Seniors get a notable break. Those 65 and older can claim an extra $6,000 deduction per person each year through 2028, on top of the existing senior standard deduction. A married couple filing jointly where both spouses qualify could see $12,000 in additional deductions. The benefit phases out once modified adjusted gross income passes $75,000 for individuals or $150,000 for joint filers.
Families with young children have several new options. The federal child tax credit is now permanently set at $2,200 and will adjust with inflation going forward. The adoption credit has also grown, with up to $5,000 of it now refundable. On top of that, families can open what the law calls Trump Accounts for children under 18, letting individuals or employers contribute as much as $5,000 a year. Any U.S. citizen born between January 1, 2025 and December 31, 2028 gets a one time $1,000 deposit into one of these accounts from the federal government.
Business Owners, Homeowners, and Wage Earners
Self employed workers and business owners can now write off 100% of the cost of qualifying equipment placed into service on or after January 20, 2025. That is a meaningful change for anyone planning capital purchases this year.
The seven tax brackets from the 2017 law are now permanent: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with the two lowest brackets adjusted for inflation. Personal exemptions for individuals, spouses, and dependents remain eliminated, though the larger standard deduction from that earlier law stays in place for good.
Homeowners get relief too. The cap on the state and local tax (SALT) deduction jumped from $10,000 to $40,000 for most income levels. At the same time, home green energy credits have been allowed to lapse, so anyone counting on those incentives should check current eligibility before assuming they still apply.
Workers who earn tips or overtime pay now qualify for new dollar for dollar deductions, capped at $12,500 for individual filers and $25,000 for joint filers. One catch: married couples who file separately cannot claim this deduction at all.
Comparing the Key 2025 Tax Changes
| Change | Who Qualifies | Amount or Limit |
|---|---|---|
| Senior deduction | Filers 65 and older | $6,000 per person, phases out above $75,000 ($150,000 joint) |
| Child tax credit | Families with qualifying children | $2,200, indexed for inflation |
| Adoption credit | Adoptive parents | Up to $5,000 refundable |
| Trump Accounts | Children under 18 | Up to $5,000 per year contributed; $1,000 government deposit for births Jan 2025 to Dec 2028 |
| Equipment deduction | Business owners, self employed | 100% of cost, placed in service on or after Jan 20, 2025 |
| SALT deduction cap | Homeowners, most incomes | $40,000, up from $10,000 |
| Tip and overtime deduction | Workers earning tips or overtime (not married filing separately) | Up to $12,500 ($25,000 joint) |
Checking Where You Stand Before You File
Start by comparing your 2024 and 2025 income against the confirmed tax brackets to see whether you land somewhere different this year. Then look at which credits and deductions actually apply to your situation, since eligibility depends heavily on age, homeownership, employment type, and family status. Some filers may also be able to deduct interest paid on a car loan, depending on their circumstances.
It is also worth reviewing your withholding. If your paycheck withholding was set up under the old rules, you could be overpaying or underpaying your tax liability without realizing it. A quick check now avoids surprises when you file.
Strategies That Could Boost Your Refund
A few practical moves stand out for filers hoping to maximize what they get back this season.
- Itemizing may now pay off for filers who previously took the standard deduction, especially if grouping deductions or accelerating charitable giving into 2025 makes sense given the new rules.
- Retirement contributions to IRAs, whether Roth or traditional, can still be made up until the tax filing deadline. Adding to your 2025 contribution now does not reduce what you can contribute for 2026.
- Investors might consider realizing gains in 2025 if rates favor doing so this year. Cryptocurrency investors should note that many will receive a Form 1099-DA for the first time, though income from crypto trades must be reported whether or not that form arrives.
- Green energy and clean vehicle credits are shifting, but not gone entirely. New and used clean vehicle credits still apply to purchases made through September 30, 2025, so it is worth checking the purchase date before assuming a credit no longer applies.
How Much Could Your Refund Actually Change?
The honest answer is that it depends entirely on your personal situation. A retired couple with income near the phaseout threshold will feel the senior deduction differently than a young family opening a Trump Account or a contractor writing off new equipment. The permanence of the 2017 brackets offers some predictability, but the newer provisions, tip and overtime deductions, the expanded SALT cap, the equipment write off, reward filers who take the time to match their specific circumstances against what changed. Reviewing your 2024 return alongside these updates before you file is the most direct way to find out where you actually stand.