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A comprehensive tax bill recently signed into law by President Donald Trump is set to introduce several significant changes. The new legislation includes an extension of provisions from the 2017 Tax Cuts and Jobs Act (TCJA), a larger standard deduction for seniors, expanded child tax credit, and tax breaks for workers receiving tips and overtime pay. However, not all provisions will take effect at the same time, and some are temporary while others are permanent.
With the new tax bill recently signed into law by President Donald Trump, Americans might see a wave of tax changes, some as early as this year. This includes an expanded child tax credit, larger standard deduction for seniors, tax breaks for tipped and overtime workers, and more. However, not all these provisions are immediate or permanent.
A timeline of key tax breaks
| Tax provision | Effective date | Temporary or permanent |
|---|---|---|
| SALT deduction cap raised to $40,000 | 2025 through 2029 | Temporary |
| Auto loan interest deduction of up to $10,000 | 2025 through 2028 | Temporary |
| Bonus deduction of $6,000 for seniors aged 65 and above | 2025 through 2028 | Temporary |
| No tax on tips and overtime pay | 2025 through 2028 | Temporary |
| New charitable contribution deduction for non-itemizers | 2026 | Permanent |
2025: Tax changes that could benefit many
In 2025, many Americans could start benefiting from a host of new tax breaks. The expanded state and local tax (SALT) deduction, which raises the cap from $10,000 to $40,000, could provide meaningful relief to taxpayers in high-tax states. Taxpayers would also be able to deduct up to $10,000 in auto loan interest for certain vehicles from 2025 to 2028. Seniors are eligible for a bonus deduction of up to $6,000, and service workers could benefit from a new exclusion of up to $25,000 in reported tip income.
2026: More changes ahead, including health care impacts
Several tax changes are set to begin in 2026, including extensions of TCJA provisions. Notable changes related to health care and taxes include modifications to Affordable Care Act (ACA) subsidies and expanded eligibility for health savings accounts (HSAs).
Some tax breaks will now expire this year
The legislation also ends several clean energy tax credits, including the electric vehicle (EV) tax credit set to expire on Sept. 30, and the energy efficient home improvement credit and the residential clean energy credit, both expiring in 2025.
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