04 Jun How would taxes change if the `Big Beautiful Bill’ is passed?

Q. How would taxes change if the `Big Beautiful Bill’ is passed?

— Taxpayer

A. The House of Representatives passed “The Big Beautiful Bill” on May 22, 2025.

To become law, the Senate has to approve it then the president has to sign it.

There’s lots of talk about how the Senate may change the bill, and then whether the House will wrangle enough votes to pass it.

If it stands as it is today, here’s what it calls for when it comes to taxes.

“The `big’ in this bill is the 2017 Tax Cuts And Jobs Act, which President Trump passed in his first term and it’s due to expire at the end of this year,” said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown. “If that happens, 62% of taxpayers would face a significant tax hike.”

This is because the increased standard deduction would go away, tax rates would go up and the Alternative Minimum Tax would come back, Kiely said.

Some of the major items included in this bill that would affect individual taxpayers are:

1. Increase the state and local tax deduction (SALT) from $10,000 to $40,000.
2. Temporarily increase the maximum child tax credit to $2,500.
3. Temporarily make tip income deductible for tax years 2025 to 2028.
4. Temporarily make auto loan interest deductible for itemizers and non-itemizers for automobiles assembled in the U.S. for tax years 2025 to 2028.
5. Temporarily increase the standard deduction for seniors for tax years 2025 to 2028.
6. Temporarily make overtime compensation deductible for the premium portion for itemizers and non-itemizers for tax years 2025 to 2028.

You notice the word “temporarily” appears in most of the changes in the bill, Kiely said.

But whether or not the provision in the bill will stand? Time will tell.

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This story was originally published in June 2025.

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