Category Taxes & Tools

In July 2025, President Trump signed a new law called the One Big Beautiful Bill (OBBB), which brings big changes to how middle-class families pay taxes. This law keeps the lower tax rates and the larger standard deduction from the 2017 Tax Cuts and Jobs Act, which means most people will owe less in taxes and filing will be easier. Families with kids will see extra help too—the Child Tax Credit increased from $2,000 to $2,200 per child, and some families can get up to $1,700 as a refund, even if they don’t owe taxes. The law also gives seniors a $4,000 bonus deduction and allows everyone to deduct up to $1,000 in charitable donations, even if they don’t itemize. Overall, the bill aims to put more money in people’s pockets, especially those in the middle class.

Despite some positive news about the economy, many Americans are still struggling. Recent interest rate cuts by the Federal Reserve have helped wealthy and older people by lowering mortgage costs and boosting their investments. However, younger and lower-income Americans are not seeing the same benefits. They face higher everyday costs, fewer job opportunities, and cuts to government programs like SNAP and Medicaid. Even though reports show strong overall economic growth, these numbers hide the fact that not everyone is doing well. Changes in taxes and government policy have helped the rich more than the poor, increasing the gap between different income groups.

Starting October 1, 2025, the IRS will no longer mail paper tax refund checks. Instead, taxpayers will get their refunds through direct deposit, prepaid debit cards, or digital wallets. This shift is part of a larger plan from President Trump’s administration to modernize how the government handles money. The goal is to make refunds faster, safer, and less expensive to send out. This change also reflects how most Americans already file and receive their taxes—digitally. With 93% of people using e-filing in 2025, moving to digital refunds is a big step toward making the entire tax process more efficient.

The "One Big Beautiful Bill Act," signed into law on July 4, 2025, is a major update to U.S. tax policy, similar in size and impact to the Tax Cuts and Jobs Act of 2017. This new law keeps many of the older tax cuts in place, adds more tax breaks for both individuals and businesses, and removes several clean energy incentives that were part of the Inflation Reduction Act. One of its biggest changes is the return of 100% bonus depreciation—this means businesses can write off the full cost of certain investments, like equipment or machinery, right away instead of spreading it out over time. Supporters believe this will boost the economy by encouraging investment, while critics are concerned about increased national debt and reduced funding for climate programs.

In 2025, new tax and Social Security changes are shaking up how Americans handle their money. The standard deduction—the part of your income you don’t have to pay taxes on—has gone up to $15,000 for single people and $30,000 for married couples who file together. Tax brackets, which determine how much tax you pay based on income, have been adjusted for inflation, but the top tax rate of 37% still applies to high earners. Other rules, like income limits for tax credits and deductions, have also moved higher. Plus, the government raised the limits for the Alternative Minimum Tax (AMT) and estate taxes, meaning more families could see financial relief. These updates are meant to reflect economic changes and help people keep more of their money.

Starting in 2026, the IRS will adjust federal income tax brackets to account for inflation, just like it does every year. But this time, thanks to a new law called the "One Big Beautiful Bill" (OBBB), the changes will be more generous for the two lowest tax brackets. These brackets will increase by about 4% to help prevent "bracket creep," which happens when people's incomes rise with inflation and push them into higher tax brackets—even though their purchasing power hasn't really gone up. Most other tax thresholds are expected to increase by around 2.7%, based on inflation. The tax rates themselves—ranging from 10% to 37%—will stay the same, meaning many people might see some relief on their taxes without facing a higher rate.