Personal and dependent exemptions eliminated

Personal and dependent exemptions are permanently eliminated. Although they were set to return in 2026, the new bill makes the elimination permanent.

Child Tax Credit increase

Starting in tax year 2025, the Child Tax Credit will permanently increase to $2,200 per qualifying child under age 17. Beginning in 2026, this amount will also be adjusted annually for inflation, helping families keep up with the rising cost of living.

To claim this credit, both the child and the taxpayer must have a valid Social Security number. For married couples filing jointly, only one spouse is required to have a valid Social Security number to qualify.

This update means more consistent support for families and larger credits at tax time — making it even more important to stay current on your eligibility and filing details.

Reduced taxes on tips

The One Big Beautiful Bill introduces a new temporary tax deduction for tips — allowing eligible taxpayers to deduct up to $25,000 in tips for tax years 2025 through 2028.

This deduction is available whether or not you itemize, making it a valuable benefit for many workers in the service industry.

If you earn tips and your income is $150,000 or less, you may qualify for the full deduction. However, the benefit begins to phase out for income above $150,000. It’s important to note that this deduction reduces your taxable income, not your taxes directly — meaning your actual savings depend on your tax bracket.

Example:
If you earned $5,000 in tips and are in the 12% tax bracket, your tax savings would be $600.

Leverage the New Deduction for Qualified Tips

Keep detailed records of your tip income and ensure it’s reported correctly. Let us review your occupation and income level (there’s a phase-out when income exceeds certain thresholds) so you can maximize this benefit.

Explore Deductions That Aren’t Widely Known

If you repay a car loan for a qualifying new U.S.-assembled vehicle, look into whether you can deduct up to $10,000 of interest. If you’ve worked substantial overtime, ask whether the “qualified overtime compensation” deduction might apply. These specialized rules could mean meaningful savings.

Maintain and Organize Records for Self-Employed or Side Hustle Income

Throughout 2025, keep a dedicated folder (digital or physical) for:

Any tips or shared-tip income (which may qualify under the new tip deduction rule)
Bring everything to us during your appointment so we can review and maximize your refund.

• Income from side gigs or self-employment

• Receipts for deductible business expenses

• Mileage logs if you drive for business use
• Any tips or shared-tip income (which may qualify under the new tip deduction rule)
• Bring everything to us during your appointment so we can review and maximize your refund.