The One Big Beautiful Bill Act, Explained in Plain English (for Individuals)
The One Big Beautiful Bill Act (OB3) has been making headlines — and with it, plenty of confusion. For individuals, the good news is that many provisions simply make prior tax laws permanent, meaning your overall tax bill may not shift as dramatically as you’ve heard online. Still, there are several key changes that could impact your 2025 planning and deserve a closer look:
No change in tax rates! Despite what you may have read, OB3 did not raise or lower individual tax rates. It simply extended the brackets put in place by the 2018 TCJA.
New car loan interest deduction. Starting in 2025, you may deduct up to $10,000 of interest on a qualifying passenger vehicle loan, subject to income phaseouts ($100k single / $200k married). To qualify, the vehicle must be new, used personally (not for business), secured by a first lien, and assembled in the U.S.
Standard deduction boost. The higher standard deduction has been extended, and it will adjust upward again in 2025 for inflation.
Senior deduction. Individuals 65+ can now claim a $6,000 deduction (doubled if married), with phaseouts beginning at $75k single / $150k married.
Child tax credit increase. The child tax credit is now permanently set at $2,200 per child, with annual inflation adjustments.
Estate and gift tax exemptions. The sky-high exemption levels — nearly $14M for individuals and $30M for married couples — are now permanent. This removes the uncertainty that had many high-net-worth families rushing to create trusts or gift assets before prior limits expired.
SALT cap expanded. The state and local tax (SALT) deduction cap has increased from $10k to $40k for both single and married taxpayers. While this is a major benefit for many, the deduction begins phasing out at $500k of income.
Why It Matters
For most individuals, OB3 means stability with a few valuable new opportunities. Whether it’s maximizing deductions, planning for retirement, or updating your estate strategy, these changes are worth incorporating into your 2025 tax plan now — before the year is over.