At Molen & Associates, we’ve been helping clients navigate the ever-changing tax code since 1980. With the passing of the One Big Beautiful Bill (OBBB), we’re looking at one of the most significant tax updates since the Tax Cuts and Jobs Act of 2017. While the bill includes dozens of provisions, one of the most important for every taxpayer—regardless of income level—is the change to standard deductions and tax brackets. 

Let’s break down what changed, what it means for you, and how to use these updates to your advantage. 

Standard Deduction: Made “Permanent” at Higher Levels 

Before the Tax Cuts and Jobs Act (TCJA) in 2017, the standard deduction was $6,300  for single filers and $12,600 for married couples filing jointly. The TCJA nearly doubled those numbers, but those increases were set to expire after 2025—meaning deductions would have reverted to pre-2017 levels. 

The OBBB has locked in the higher standard deduction amounts going forward, with annual inflation adjustments. For the 2025 tax year: 

●Single filers: $15,750 

●Married filing jointly: $31,500 

●Head of household: $23,625 

These amounts will continue to adjust for inflation in future years. While the bill uses the term “permanent,” it’s important to remember that any future Congress can change the rules—so it’s wise to plan with the current law in mind. 

Why it matters: The higher standard deduction reduces taxable income for the vast majority of taxpayers. If you don’t have enough itemized deductions to exceed these amounts, you’ll automatically benefit from the larger write-off without tracking mortgage interest, charitable donations, or other itemized expenses. 

Tax Brackets: Current Rates Locked In 

The OBBB also makes permanent the seven tax brackets introduced under the TCJA, 

which were set to expire after 2025. The rates remain: 

●10% 

●12% 

●22% 

●24% 

●32% 

●35% 

●37% 

While the percentages haven’t changed, the income ranges for each bracket have increased for 2025 to account for inflation. That means more of your income will be taxed at lower rates compared to pre-2017 law, and the risk of a bracket “snap-back” in 2026 is gone—at least for now. Planning tip: Stable brackets make it easier to time income recognition, capital gains, and retirement account conversions. For example, if you’re considering a Roth conversion, you can plan with more certainty knowing that your target tax rate won’t disappear in a year. 

Related Provisions Worth Noting 

While the standard deduction and bracket changes are the big headline, the OBBB includes other provisions that can work hand-in-hand with your tax planning: 

SALT Cap Increase (Through 2029) 

The state and local tax (SALT) deduction cap rises from $10,000 to $40,000 from 2025 to 2029. For taxpayers in high-tax states, this can make a substantial difference. The cap begins to phase out for incomes above $500,000 but never falls below $10,000. 

Child Tax Credit Increase 

The Child Tax Credit rises from $2,000 to $2,200 per qualifying child and will now be indexed for inflation. The refundable portion of the credit also phases in faster, which is especially helpful for lower-income families. 

Senior Deduction Boost 

From now until 2028, taxpayers age 65 or older can claim an additional $6,000 deduction ($12,000 if both spouses are over 65), with phase-outs starting at $75,000 for single filers and $150,000 for married couples filing jointly. 

New Targeted Deductions 

●Tipped and Overtime Income (2026–2028): Up to $25,000 in tipped income and $12,500 in overtime pay may be income-tax-free for single filers earning under $150,000 ($300,000 MFJ). 

●U.S.-Assembled Auto Loan Interest: Deduct up to $10,000 annually in interest for qualifying new vehicle purchases between 2025–2028, with income phase-outs. 

Charitable Deduction for Non-Itemizers 

Starting after 2025, non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions annually, with a 0.5% of AGI floor. 

Why This Matters for Your Tax Planning 

These “permanent” provisions offer stability, but they also open doors for strategic tax planning: 

●Know your deduction strategy: Compare itemizing vs. taking the standard deduction annually—especially if you have years with higher mortgage interest or charitable giving. 

●Leverage bracket certainty: Plan multi-year strategies for Roth conversions, capital gains, and business income timing. 

●Stack deductions: For example, a retiree could benefit from the senior deduction boost and the standard deduction while managing taxable income in lower brackets. 

Final Takeaway 

The OBBB keeps the higher standard deduction and current tax brackets in place, removing one of the biggest tax-planning uncertainties looming over 2026. While “permanent” in tax law is never truly forever, these changes give taxpayers and business owners room to plan with more confidence. 

Want to see how these updates could impact your personal or business taxes? 

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