The "One Big Beautiful Bill" (OBBBA), signed in 2025, is designed to deliver significant tax relief for working and middle-class families by making the 2017 Trump tax cuts permanent and introducing new benefits. It features a $1,300 average tax cut for typical families, increased standard deductions, and a $2,500 child tax credit, while targeting no taxes on tips and overtime.
Key Middle-Class Tax Relief Measures:
- Permanency: Makes the 2017 tax cuts, including lower rates and a doubled standard deduction, permanent.
- Targeted Exemptions:Eliminates federal taxes on tips, overtime pay, and auto loan interest for American-made vehicles
.
- Child Tax Credit: Boosts the credit to $2,500 for 40 million families.
- Increased Deductions: Boosts the standard deduction by $750 for single filers and $1,500 for joint filers.
- Senior Benefits: Introduces a $4,000 deduction for seniors (age 65+) with modified adjusted gross income below $75,000 (single) or $150,000 (joint).
- SALT Cap Increase: Increases the state and local tax (SALT) deduction cap to $40,000 for taxpayers earning under $500,000.
Know the facts before you make fool out of yourself