What you need to know about the new tax changes for 2025 to 2028
Taxes are changing in a big way and the One Big Beautiful Bill Act (OBBBA) is packed with updates that could put more money back in your pocket. Whether you’re a parent, a rideshare driver, a small business owner, or just trying to make every dollar count, these changes matter. We’ve broken down the OBBBA tax updates into plain-English so you can see exactly how they benefit real people like you.
Why the OBBBA Matters for You
This bill isn’t just policy, it’s personal. It’s about real-life savings, bigger refunds, and making tax benefits more accessible. Many of the credits are refundable, which means you could get money back even if you don’t owe a penny in taxes.Whether you file yourself or come to Liberty Tax for expert help, understanding these changes can help you plan smarter, file better, and get what you’re owed.
Key Individual Tax Changes: What’s In It for You?
Auto-Loan Interest Deduction (2025 to 2028)
Bought a new, U.S.-built car or bike and make less than $100,000 if single or $200,000 if married? You can write off up to $10,0000 of interest every year even if you don’t itemize.
Child and Dependent Care Credit Boost (2026 to 2028)
Covers up to 50 percent of childcare expenses if income is under $15,000, 35 percent up to $75,000 income, and stays capped at 20 percent over $105,000. Maximum credit is $3,000 if single or $6,000 if married.
Child Tax Credit
Each kid is worth a $2,200 child tax credit and even if you don’t owe any tax, you could still get up to $1,700 per kid as a refund.
Energy Efficient Home Credits End December 31, 2025
Thirty percent credits for energy efficient windows, heat pumps and rooftop solar end after 2025.
EV Clean Vehicle Credit Ends September 30, 2025
The $7,500 clean vehicle credit goes away unless your new electric car is delivered and in use by September 30, 2025. This also applies to used electric vehicles, with a credit of up to $4,000.
Gambling Loss Cap Starting 2026
You can only write off up to 90 percent of your gambling winnings with losses. At least 10 percent will be taxed no matter what.
No Tax on Overtime (2025 to 2028)
The extra half-time part of overtime pay is deductible up to $12,500 for individuals and $25,000 for married couples filing jointly.
No Tax on Tips (2025 to 2028)
Qualified tips up to $25,000 won’t be taxed as income. Still needs to be reported. Phases out at $150,000 for single or $300,000 for married.
Non-Itemizer Charitable Deduction (Starting 2026)
You can write off up to $1,000 if single or $2,000 if married, in charitable donations even if you take the standard deduction.
Permanent Low Tax Rates and Bigger Brackets
Lower tax rates from past years will continue. This means more of your income stays taxed at a lower rate before moving into a higher bracket.
SALT Cap to 40 Thousand (2025 to 2030)
You can now deduct up to $40,000 in state and local taxes if your income is under $500,000 for married or $250,000 for single.
Senior Bonus Deduction (2025 to 2028)
People age 65 and older get an extra $6,000 each or $12,000 per couple knocked off their taxable income.
Standard Deduction Permanently Larger
Everyone gets a bigger no tax zone, making the standard deduction larger. Now $15,750 for single, $23,625 for head of household, and $31,500 for married.
Trump Accounts for Kids (Births 2025 to 2028)
Babies born between 2025 and 2028 get a $1,000 starter account from the government. Families can add $5,000 a year with tax benefits.
Big Breaks for Small Businesses
20 Percent Profit Deduction Made Permanent
If you’re self-employed or own a small business, you can keep taking 20 percent off your income from running the business each year.
100% Bonus Depreciation on Equipment
Buy gear for your business after January 20, 2025? You can deduct the full cost right away by writing it off.
Bigger Section 179 Cap
You can now instantly write off up to $2.5 million dollars in business purchases.
Tips to Make the Most of These Changes
- Plan early because many benefits start or expire soon.
- Track deductions because even if you don’t itemize, new rules may apply.
- Keep receipts for vehicle purchases, business gear, and donations.
- Ask Liberty Tax for help claiming every benefit you deserve.
Next Steps for Your Tax Planning
With the One Big Beautiful Bill Act now signed into law, a wave of tax changes is set to roll out this year and into the future. Still, the smartest approach to preparing for the 2025 tax season remains unchanged: start planning now.If your goal is to reduce what you owe—or boost your refund—when you file in 2026, now is the ideal time to connect with your local Liberty Tax expert. Spending just a few minutes today to review your tax situation can help you get organized, take advantage of every eligible credit and deduction, and position yourself for a bigger refund or a smaller tax bill.
Common Questions About the OBBBA
Can I claim the auto-loan deduction if I bought a used car?
Only if the car is U.S.-built and newly purchased during 2025 through 2028.
Do I need to itemize to claim charitable donations?
No. You can now deduct up to $1,000 if single or $2,000 if married without itemizing.
What if I have multiple kids? Do I get multiple credits?
Yes. The Child Tax Credit applies per child and most of it is refundable.
I’m self-employed. Does the 20 percent deduction apply to me?
Absolutely. If you report income on Schedule C, you’re eligible.
How do I open a Trump Account for my newborn?
Details will come from the U.S. Treasury or IRS in 2025. Liberty Tax will help guide you.
