Category Taxes & Tools

As 2025 comes to a close, major tax law changes are affecting how people plan their finances. One big update is the expansion of the SALT (state and local tax) deduction, which may lead more people to itemize their deductions instead of taking the standard deduction. Although the 2017 tax brackets and standard deductions are now permanent, other changes—like new income rules and bigger deductions for seniors—mean that taxpayers need to think carefully about how much money they earn and report. There’s also a higher transfer-tax exemption, encouraging some families to give financial gifts or make estate planning moves before the year ends. These changes come during a time of economic uncertainty and political tension, making smart tax planning even more important.

The Trump administration has restarted a major student loan forgiveness program for people who have been paying their federal loans for 20 or 25 years under the Income-Based Repayment (IBR) plan. This move comes after a pause in loan forgiveness that began in July. Millions of borrowers, many of them in their 40s or older, are now being told they can have their remaining loan balances wiped out. However, there’s a catch—because the forgiven amount may count as taxable income, borrowers need to decide by October 21, 2025, if they want to opt out. This decision is especially important as the tax deadline gets closer.

In 2025, major tax changes took effect with the passage of the One Big Beautiful Bill Act (OBBBA), which impacts how much money families and retirees can save on their taxes. One of the biggest updates is the increase in the state and local tax (SALT) deduction limit, which rose from $10,000 to $40,000. However, this larger deduction starts to shrink for people making over $500,000 and goes back to the original $10,000 once their income hits $600,000. Retirees also get a break—seniors can now claim an extra $6,000 deduction, or $12,000 for married couples, although this benefit begins to phase out if their income is over $150,000. Because of these changes, smart planning—like grouping deductions or adjusting when you take income—can help people lower their tax bill.

In October 2025, the Treasury Department and the IRS announced new guidance on a major tax law passed earlier that year under the Trump administration. This $3.4 trillion law brings big changes to the U.S. tax system, affecting both individuals and small businesses. Key updates include expanding tax deductions for small businesses under Section 199A and adding new tax breaks for things like tips, overtime pay, and income earned abroad. The government is working to clarify these new rules so that taxpayers and business owners know how to follow them correctly—especially during a time of political changes and a shaky economy.

In 2025, former President Trump signed major tax cuts into law that are now causing financial problems for many states, especially those led by Democrats. These changes lower federal income tax rates but also reduce how much money the federal government gives to states. As a result, states that depend heavily on this funding—often to support programs like Medicaid, public schools, and infrastructure—are facing serious budget gaps. Democratic-led states with larger social programs are being hit the hardest. As the 2026 elections approach, many of these states are scrambling to find new ways to raise money or make tough cuts to services people rely on.

In September 2025, Congress passed a major new law called the "One Big Beautiful Bill," backed by President Donald Trump. This bill makes permanent the individual tax cuts that were first introduced in 2017 under the Tax Cuts and Jobs Act. It raises the standard deduction to $15,000 for single filers and $30,000 for married couples, meaning people can keep more of their income before paying federal taxes. According to the Tax Foundation, about 62% of Americans will avoid higher taxes in 2026, and the average taxpayer will save around $3,752. However, while wealthier counties will benefit the most, rural and lower-income areas are expected to see smaller tax savings. The bill also includes cuts to some social spending programs to address inflation concerns.