The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, makes many individual income tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduces several new, mostly temporary, deductions and credits. Key changes for individual taxpayers include:

Permanent Changes (effective from 2025 unless noted) 

•  Income Tax Rates & Brackets: The seven tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) and their associated income thresholds are made permanent.
• Standard Deduction: The nearly doubled standard deduction amounts are permanently increased and adjusted for inflation. For tax year 2025, they are $15,750 (single) and $31,500 (married filing jointly).
• Child Tax Credit (CTC): The maximum credit is permanently increased to $2,200 per qualifying child (from $2,000) for 2025, and adjusted for inflation in future years.
• Personal Exemptions: The suspension of personal exemptions is made permanent.
• Estate Tax Exemption: The federal estate tax exemption is permanently raised to $15 million per individual (indexed for inflation starting in 2027). 

Temporary New Provisions (effective 2025-2028)

• Deduction for Seniors: Taxpayers age 65 and older can claim an additional deduction of $6,000 (single filers) or $12,000 (joint filers, if both qualify), subject to income phase-outs.
• Deduction for Tip Income: Up to $25,000 of qualified tip income is tax-deductible for eligible workers.
• Deduction for Overtime Pay: A deduction for the premium portion of overtime pay is available, up to $12,500 (single) or $25,000 (joint filers).
• Car Loan Interest Deduction: Individuals can deduct up to $10,000 in interest on loans for new personal-use vehicles assembled in the U.S., subject to income limits.
• State and Local Taxes (SALT) Cap: The cap on the SALT deduction is temporarily raised from $10,000 to $40,000 (with annual 1% increases) through 2029, with a phase-out for high-income earners. 

Business and Other Changes

• Bonus Depreciation: The ability for businesses to immediately deduct 100% of the cost of eligible short-lived capital assets is permanently restored.
• Energy Credits: Most clean energy tax credits established by the Inflation Reduction Act (IRA) have been repealed or phased out early.
• Scholarship Tax Credit: A new federal tax credit (up to $1,700) for cash contributions to qualified Scholarship Granting Organizations (SGOs) will be available starting in 2027.
• Child Savings Accounts: A new program offers a one-time $1,000 government contribution to tax-advantaged savings accounts for babies born between 2025 and 2028, with annual contribution limits of $5,000. 

These changes have made tax planning more complex due to a mix of permanent and temporary provisions with specific income phase-outs and eligibility criteria. The IRS has provided initial guidance through notices available on its website, the IRS OBBBA Provisions page.