On July 4, 2025, the legislation known as the “One Big Beautiful Bill” was signed into law. The new tax laws are as much about old tax laws as they are about new ones.

The law permanently extends tax cuts from the Tax Cuts and Jobs Act of 2017 and temporarily increases the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct. For certain workers, a temporary change provides a tax deduction for qualified tips and qualified overtime income.

• One Big Beautiful Bill — 2025 tax law changes
• Other 2025 tax law changes
• One Big Beautiful Bill tax law changes for your 2026 (and on) tax returns

One Big Beautiful Bill — 2025 tax law changes

Most of the changes in the One Big Beautiful Bill take effect on Jan. 1, 2026, but some are retroactive and could impact your 2025 tax returns that you file in 2026. 

Many of the changes have certain requirements such as adjusted gross income limits, and some are temporary, only lasting for a few years. Changes that might affect the most common 2025 tax returns include:

• No tax on tips — Deduction of up to $25,000 per taxpayer with phaseout for modified adjusted gross income (MAGI) over $150,000 (over $300,000 for married filing jointly filers)
• No tax on overtime — Deduction of up to $12,500 per taxpayer with phaseout for MAGI over $150,000 (over $300,000 for married filing jointly filers)
• Increased child tax credit — Increased from $2,000 to $2,200 for qualified taxpayers
• Additional senior deduction (2025 through 2028) — Additional $6,000 deduction for taxpayers 65 and older with phaseout for MAGI over $75,000 (over $150,000 for married filing jointly filers)
• Partially refundable adoption credit — Up to $5,000 (adjusted for inflation) refundable
• Increased state and local tax (SALT) itemized deduction — Increased to $40,000 (adjusted annually) for 2026 through 2029
• Deduction for interest payments on certain vehicles — Up to $10,000 deduction with phaseout for MAGI over $100,000 (over $200,000 for married filing jointly filers)
• Trump savings accounts for children — A form of an IRA retirement account with a $1,000 tax credit when opened for a child born between Jan. 1, 2025, and Dec. 31, 2028. Additional contributions are also allowed with distributions beginning after the beneficiary turns 18.
• End of the electric vehicle credit as of Sept. 30, 2025
• Increase in the standard deduction — Increases the 2025 standard deduction to $15,750 for single, $23,625 for head of household and $31,500 for married filing jointly filers. These amounts will increase with inflation each year.

Additional items included in the bill mostly having an impact on businesses include:

• Restoration of 100% bonus depreciation
• Restoration of expensing of certain R&D costs
• Business interest deductions moving back to the EBITDA standard
• 100% expensing for certain manufacturing structures (temporary)
• Increased Section 179 limits
• 1099-K issuance threshold increase

Other 2025 tax law changes

Inflation adjustments to deductions and brackets

Income tax brackets, eligibility for certain tax deductions and credits, and the standard deduction will all adjust to reflect inflation.

Tax brackets will also be adjusted for inflation with each bracket increasing its range of income. For example, the top end of the 10% tax bracket for a single filer will increase from $11,600 for 2024 to $11,925 for 2025. The 37% rate starts at $609,350 for a single filer in 2024 but doesn’t start until $626,350 for 2025.

Deductions and credits phaseout adjustments

In line with the adjustments for inflation, many tax deductions and tax credits will have their phaseouts adjusted to account for these changes. Some phaseout changes to note are:

• Earned Income Tax Credit — The maximum credit for filing jointly as a married couple and claiming three or more qualifying dependents amounts to $8,046 in 2025, with the credit completely phased out at $68,675 of adjusted gross income (AGI). If you are a single filer with no dependents, you can receive a maximum credit of $649 with your phaseout beginning at $19,104 of AGI.
• The Alternative Minimum Tax — Higher exemptions and income phaseouts will occur in 2025. See below for more details.
• IRA contributions — Contribution amounts remain the same in 2025, but phase-out levels for taking deductions for these contributions increase as follows:
  • For active participants in employer retirement plans, phaseout for making individual retirement account (IRA) contributions will occur at AGIs between $79,000 and $89,000 for single and head of household filers, $126,000 and $146,000 for joint returns.
  • For those married filing jointly, with IRAs who do not actively participate in another plan, but their spouse does, phaseout will now range from $236,000 to $246,000.
  • For those filing as married filing separately, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 to $10,000.
  • Phaseouts do not apply if neither the taxpayer nor the spouse has a workplace retirement plan.

What’s new with the Alternative Minimum Tax (AMT) adjustments

Because the AMT’s exemptions did not automatically update for inflation, an increasing number of middle-income taxpayers got hit with the AMT until a permanent, annual update got put in place starting in 2013. Now, the AMT exemption amount automatically adjusts with inflation, allowing many taxpayers to avoid the tax.

In 2025, these amounts will change to $88,100 with phaseout beginning at $626,350 ($137,000 for married couples filing jointly with a phaseout beginning at $1,252,700).

Planning ahead: How to prepare for 2025-2026 taxes

With these tax changes in 2025, you can take advantage by planning now. Don’t let opportunities like contributing more toward your retirement plan or participating in a health savings account pass you by. Contributing to these accounts can save you money for needs you have down the road and lower your tax bill today, no matter what 2026 brings.

One Big Beautiful Bill tax law Changes for your 2026 (and on) tax returns

As the TCJA changes were set to expire at the beginning of 2026, the 2025 One Big Beautiful Bill makes many of these once-temporary changes permanent. Much of what takes effect beginning in 2026 is in essence a permanent continuation of the Tax Cut and Jobs Act of 2017.

While there are a handful of changes that are retroactive into 2025, the majority of the changes in the One Big Beautiful Bill take effect on Jan. 1, 2026. Similar to some 2025 changes, many of those that begin in 2026 have certain requirements such as adjusted gross income limits, and not all are permanent — with some only lasting a few years.

In addition to the tax-year 2025 retroactive items above, 2026 and on tax changes include many permanent ones including:

• Elimination of personal and dependent exemptions
• Increased standard deductions
• Current tax brackets
• Increased child tax credit
• $750,000 deductible personal mortgage limit
• Limitation on personal casualty losses, miscellaneous itemized deductions and moving expense deduction for most taxpayers
• Increased AMT exemption 
• Increase of estate tax exemption
• Deduction for qualified business income at 20%

Unless otherwise noted, all of the retroactive business-related identified items above that begin in 2025 carry into 2026 and on.

Navigating the complicated maze of state and federal tax deductions and credits can feel overwhelming, but it starts with one simple task: keeping the right receipts.

Whether you’re aiming to boost your tax refund or to simply organize your financial records, knowing which receipts to save can make all the difference come tax season.

That’s why it’s crucial to know which receipts to retain and why.

We’ll explain how tax-savvy recordkeeping can help you make the most of your deductions and common categories to review for receipts.

• Medical expenses
• Childcare expenses
• Self-employment expenses
• Other expenses

Medical expenses

While you may have heard that medical expenses are deductible on your personal income tax return, you may be wondering exactly which expenses qualify. To deduct your medical expenses, you’ll have to itemize your deductions.

You can deduct medical expenses only if they amount to more than 7.5% of your adjusted gross income, or AGI. This means if your total medical costs don’t reach this threshold, you won’t be able to claim them as deductions.

Qualified deductions include any of the following expenses paid for yourself, your spouse, your dependents and any children that you could have claimed but didn’t because of a divorce or separation agreement or because their income was too high:

• Premiums for medical, dental, long-term care, vision, Medicare Part B, and Medicare Part D insurance that you are not reimbursed for and that are not paid using pretax dollars
• Co-pays for medical, dental or vision care
• The cost of eyeglasses, contact lenses, prescription medicine, breast pumps or other lactation aids, crutches, hearing aids, braces, wheelchairs and other medical aids, all costs associated with guide dogs, and medical exam or test fees
• Acupuncture, chiropractic services, podiatrists, sessions with a psychiatrist or psychologist and occupational and physical therapy
• Nursing care, hospital stays, programs to help you stop smoking, and weight-loss programs for the treatment of obesity or another condition diagnosed by a doctor
• The cost of parking fees, tolls, transportation and mileage for the trip to and from appointments with any of these medical professionals, transportation via ambulance to a medical facility, and the cost of overnight hotel stays for treatment that is received out of town

Childcare expenses

You may be able to receive a credit for child or dependent care expenses paid to a babysitter, daycare, day camp, after-school program or other care provider.

If the care is provided in your home, additional expenses may also qualify, such as the cost of a maid, cook or housekeeper hired to provide services or care for your child or dependent.

These expenses only qualify if you paid them to enable you (and your spouse if married) to work or look for work. In order to qualify, you and your spouse must both have earned income, unless your spouse is disabled or a full-time student.

You can collect this credit for one of the following types of dependents:

• A child under the age of 13 who you claim as a dependent
• A disabled spouse or dependent who is physically or mentally unable to care for themselves

Self-employment expenses

When you are self-employed, many of the expenses you pay for such as materials, supplies, marketing, office expenses, insurance and travel can be deducted when you file your income taxes. Certain utilities and expenses for operating a business from your home also may qualify.

For self-employed individuals, it is often helpful to save receipts from every purchase you make that is related to your business and to keep track of all of your utility bills, rent, and mortgage information for consideration at tax time.

If you want to avoid a mound of paperwork, scan receipts and keep digital copies throughout the year.

Other expenses

There are a few other receipts that you may want to save, depending on your personal tax situation. For some, it is beneficial to deduct your state and local sales tax on your itemized deductions, rather than the amount of state and local income taxes you paid during the year.

Typically, the deduction of sales tax only benefits a person with one or more large purchases for the tax year — such as a car, boat, RV, or home addition — that led to a greater amount of sales tax paid than the amount of income tax withheld or when you live in a state that does not have a state income tax. If you meet this description, you’ll want to save all sales receipts.

Next steps

Organizing your receipts can make a big difference at tax time. Whether you use a simple folder or a digital app, getting your documents in order can save you time and effort when you file your taxes.

While you don’t have to include receipts with your tax return, you might need them to verify your expenses if the IRS decides to audit your return.

By putting a simple organizing strategy into practice, you’re not just preparing for the next tax season — you’re helping build a foundation for improved financial management.

This article was adapted from TurboTax.

Every time you earn income, you’ll most likely owe income taxes. Your employer’s tax payments for you are based on the information you submit on your Form W-4.

When too much money is withheld from your paychecks, you give Uncle Sam an interest-free loan. You then get a tax refund. But if too little is withheld, you might get an unexpected tax bill. You might even face a penalty for underpayment.

Some life events result in more taxes. Others give you credits and deductions that lower your taxes. The list of these events is long, but read on to learn about five of the most common reasons to revisit your W-4 withholding.

What’s a W-4 and why should I pay attention to it?

When you fill out your W-4 form, you’re letting your employer know how much money to take out of your paycheck and send to the federal government on your behalf throughout the year.

The key to paying the right amount of tax is to update your W-4 regularly.

• Do this whenever you have a major personal life change.
• The goal is to reduce the potential for a tax bill and have a tax refund at zero or close to it.
• If you count on a big tax refund every year, you should also pay attention to your withholding. How much you have withheld impacts your refund.

Here are five common reasons why you may want to review your W-4 withholding.

1.  You get a second job

Getting a second job is the most common reason for needing to adjust your W-4.  Do this whether you moonlight, have a home business or get another full-time job.

Any time your income goes up, your tax liability will likely go up too, requiring a new W-4. If your extra income comes from a side job with no tax withholding, you could submit a new W-4. It would adjust the withholdings at your main job for the extra income.

2. Your spouse gets a job or changes jobs

A change in household income, up or down, could put joint filers in a different tax bracket. This could mean that one or both of you should change your withholdings.

To ensure accuracy, use your combined income to figure out the appropriate withholding.

3.  You’re unemployed part of the year

If you get laid off from your job and stay unemployed the rest of the year, you likely had too much tax withheld while you were working. So, if you get rehired in the same year, you’ll need to adjust for the downtime.

To avoid paying too much tax, you should adjust your withholding on a new W-4.

4.  You get married … or divorced

Tying or untying the knot will most likely change your tax rate, especially if both spouses work. Married people who file jointly get a lower tax rate. They also get other deductions. These benefits are not available to those who file as single.

Getting a divorce can take you back to single or head of household status and reverse many tax benefits. If you fail to account for these events on your W-4, your withholdings could be inaccurate.

5.  You have a baby … or adopt one

A new baby is more than a bundle of joy. It can be a major tax event, too.

You can include the amount of the child tax credit that you will get in your W-4 if you are eligible.

If you adopt a child, there’s potentially another tax credit. Any of these could allow you to reduce your withholding to account for the added tax benefits.

How to adjust your W-4 withholding

The IRS replaced the old W-4 format with a new system beginning in 2020. The new W-4 tries to be more accurate in estimating your tax withholding. This lets you get closer to owing $0 or getting a $0 refund when you file your tax return.

The new W-4 system:

• Aims to reduce the complexity of calculating how much to withhold. It also aims to increase the transparency and accuracy of the system.
• Uses the same underlying information as the old design.
• Replaces complicated worksheets with more straightforward questions.

It’s easy to adjust your withholding. You can do it on paper or electronically. The old-fashioned way is to walk through the worksheets on the W-4 form.

What’s next?

How much your employer sets aside to pay federal taxes on your behalf is determined by the information you provide on your Form W-4.

Having too little withheld from your paychecks could mean an unexpected tax bill or even a penalty for underpayment. That’s why regularly updating your W-4 is important to ensure you pay the correct amount of taxes. You can adjust your W-4 at any time during the year. Just remember, adjustments made later in the year will have less impact on your taxes for that year.

This article was adapted from TurboTax.