Published July 9–10, 2025

“One Big Beautiful Bill” Signed — Massive Tax Law Overhaul

A sweeping new law, the One Big Beautiful Bill Act (OBBBA), was signed on July 4, introducing bold tax changes:

  • Expanded SALT deduction — cap raised to $40,000 (phase‑down starts for incomes above $500K), reversing 2017 limits.
  • Deduction on tipped & overtime income — up to $25K in tips/$12.5K in overtime for those ⩽$150K income through 2028.
  • New exclusions/deductions — seniors get $6K deduction; auto buyers can deduct up to $10K of interest; expanded child tax credit to $2,200/child.
  • Private school voucher credit — dollar‑for‑dollar federal tax credit for donations.

While middle-class households see meaningful relief, critics argue it disproportionately helps the wealthy and worsens inequality.

🏠 SALT Deduction Cap Skyrockets For Some Taxpayers

The SALT (state and local tax) deduction cap has been restructured under the new GOP tax package, affecting high-tax states from 2025‑2029.

What’s changed:

Who benefits:
Primarily higher-income earners in states like California and New York who itemize deductions; estimated cost to federal coffers is ~$130 B over five years washingtonpost.com.

Concerns:
Critics argue it creates imbalance and favors wealthy households, potentially undermining the fairness of the tax system washingtonpost.com.

Conclusion:
This SALT cap change is a huge relief for some—but remains contentious due to its income bias.

👵 Extra Tax Perks for Seniors, Tips & Overtime

Under the newly enacted tax law, several targeted breaks became available from 2025‑2028 — benefiting seniors, tipped workers, and anyone earning overtime.

Highlights:

Scope & planning:
These deductions offer good opportunities for financial planning, but expire after 2028 — careful tax planning is needed to maximize value marketwatch.com.

Conclusion:
These targeted deductions grant real benefits — seniors, service workers, and families can see meaningful tax reductions during the next few years.