Author: Steve Olsen, Vice President Wealth Management Officer

The One Big Beautiful Bill Act was signed into law by President Trump on July 4, 2025. The legislation makes permanent most of the tax cuts embedded in the 2017 Tax Cuts and Jobs Act (TCJA), along with some significant additional tax changes.

The passing of this legislation prevented the scheduled tax increases that were set to take effect on December 31, 2025. Beyond simply maintaining current tax rates, the new law reduces taxes further for certain groups, particularly seniors, parents of young children, and individuals facing high state and local taxes. However, it’s important to note that some of these benefits are temporary.

Here are a few highlights of the law:

• Tax brackets. Permanently extends, with inflation adjustments, the tax brackets under the 2017 TCJA.
• Standard deduction. Permanently increases the standard deduction and annually adjusts it for inflation.
• SALT deduction. The SALT (state and local tax) deduction increases from $10,000 to $40,000 before reverting to $10,000 in 2030.
• Child tax credit. The child tax credit is made permanent, is increased to $2,200 for 2025, and indexed to inflation.
• Estate and gift tax. The estate and gift tax exemption is permanently raised and indexed to inflation.
• No taxes on tips and overtime. The new law caps deductions on tipped income of up to $25,000 and overtime income of $12,500 ($25,000 for joint filers). This is only good for tax years 2025 through 2028.
• Senior tax deduction. People age 65 and older get an additional $6,000 deduction that phases out over certain income levels. This is only good for tax years 2025 through 2028.
• Deductible car loan interest. For taxpayers under certain income levels, the new law allows for a deduction of up to $10,000 of loan interest for purchased vehicles whose final assembly took place in the U.S. This is only good for tax years 2025 through 2028.

PremierBank does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.