Top 10 Tax Planning Strategies from the New 2025 Tax Law
Big news out of Washington: On July 4, 2025, the President signed the One Big Beautiful Bill Act into law—bringing sweeping changes to the tax code. Whether you're a retiree, small business owner, or simply planning ahead, these new tax rules offer some valuable opportunities (and a few traps to avoid).
Here are the Top 10 most important tax planning strategies under the new law.
1. ✅ Lock In Lower Tax Rates—Permanently
The individual tax brackets from the 2017 Tax Cuts and Jobs Act (TCJA) are now permanent. That means the 37% top rate and the compressed brackets are here to stay.
Planning Tip: Consider accelerating income, Roth conversions, or realizing capital gains while rates remain favorable.
2. 👵 Claim the New Senior Bonus Deduction
Seniors age 65+ can now claim an additional $6,000 deduction per person—on top of the standard deduction. This temporary deduction is available through 2028.
Planning Tip: Keep your adjusted gross income (AGI) below the threshold to maximize this benefit. Note: Income limits for this deduction should be verified with official IRS guidance.
3. 💰 Deduct Tips—Up to $25,000
Employees who earn tips (W-2 or 1099-K) can deduct up to $25,000 of that income each year for married couples filing jointly, subject to income phase-outs. This deduction is available from 2025 through 2028.
Planning Tip: Workers in hospitality, salons, and delivery services should optimize how tips are reported to stay under deduction caps.
4. ⏱️ New Overtime Deduction
Overtime pay that exceeds your regular hourly rate can now be deducted—up to $12,500 per year. This is another temporary provision running through 2028.
Planning Tip: If you're in a high-overtime role, time your shifts and wages to qualify for this above-the-line deduction.
5. 🚗 Auto Loan Interest Is (Partially) Back
You can now deduct up to $10,000 in interest on loans for U.S.-manufactured vehicles. There are income limits and this provision runs from 2025 through 2028.
Planning Tip: If you're considering a new vehicle, financing it (rather than paying cash) could have tax advantages—if you qualify.
6. 🌆 State & Local Tax (SALT) Deduction Cap Raised
The SALT deduction cap increased from $10,000 to $40,000 for joint filers starting in 2025 and remaining through 2029, with phase-downs at higher income levels.
Planning Tip: Taxpayers in high-tax states like NY, CA, or NJ should consider bunching property and state tax payments into one year to maximize deductions before the cap returns to $10,000 in 2030.
7. 👪 Boosted Child & Family Credits
The Child Tax Credit increases to $2,200 per child, with higher phase-out thresholds and larger benefits for younger children.
Planning Tip: Review eligibility with your tax advisor, especially if your income changed due to job shifts or retirement.
8. 🏛️ Higher Estate & Gift Tax Exemptions
The estate tax exemption is now permanently set at $15 million per person beginning in 2026, doubling for married couples.
Planning Tip: High-net-worth families should review their estate plans and consider gifting strategies or trusts to take advantage of the increased exemption.
9. 🎓 529 & ABLE Account Flexibility
The new law allows more generous rollovers from 529 college savings to Roth IRAs and ABLE accounts.
Planning Tip: If your child or grandchild doesn't need all their 529 funds, explore rolling leftover amounts into a Roth IRA.
10. 🛠️ Business Expensing Extended
Small businesses can continue to expense 100% of certain equipment and software purchases through 2027.
Planning Tip: If you're self-employed or run a small business, accelerate planned purchases before this expires.
Final Thoughts
This new law opens the door to major planning opportunities—but only if you take action. From retirees and working families to small business owners, there's something in here for nearly everyone.
➡️ Want to find out how these changes affect your taxes? Let's build a personalized tax plan around your goals.
📅 Schedule a Consultation with Chris below
Important Disclaimer: While this summary reflects the major provisions of the One Big Beautiful Bill Act, specific dollar amounts, income thresholds, and detailed requirements should be confirmed with the official legislative text or current IRS publications. Tax laws can be complex, and individual circumstances may affect how these changes apply to your situation.
