Tax Reform Calculator
See how the One Big Beautiful Bill changes your 2025 taxes: the bigger standard deduction, the new deductions for tips, overtime, seniors and car loans, the higher SALT cap and the larger child tax credit.
Want the details? Read the tax law changes
The new tax law in plain English
- Standard deduction
- For 2025: $15,750 for single filers and married filing separately, $31,500 married filing jointly and $23,625 for heads of household, up from $15,000, $30,000 and $22,500.
- SALT deduction
- If you itemize, you can deduct up to $40,000 of state and local taxes for 2025 ($20,000 married filing separately), up from $10,000. The cap rises 1% a year through 2029, and shrinks for incomes over $500,000.
- No tax on tips
- A deduction of up to $25,000 of qualified tips a year, for 2025 through 2028, in jobs that customarily receive tips. It shrinks above $150,000 of income ($300,000 filing jointly).
- No tax on overtime
- A deduction for the extra half of time-and-a-half overtime pay, up to $12,500 a year ($25,000 filing jointly), for 2025 through 2028, with the same income limits as tips.
- Car loan interest
- A deduction of up to $10,000 a year of interest on a loan for a new personal car, SUV, van, pickup or motorcycle assembled in the U.S., for 2025 through 2028. It shrinks by $200 for each $1,000 of income above $100,000 ($200,000 filing jointly).
- Child tax credit
- Up to $2,200 for each child under 17 for 2025, from $2,000. It is $2,200 for 2026 too, and rises with inflation in later years. Up to $1,700 of it can be refunded.
- Senior deduction
- Up to $6,000 more for each person 65 or older, for 2025 through 2028, whether or not you itemize. It shrinks by 6% of income above $75,000 ($150,000 filing jointly).
- Tax rates and brackets
- The seven rates, from 10% to 37%, stay the same and are now permanent. The brackets still rise with inflation each year.
Frequently asked questions
What is the One Big Beautiful Bill?
The tax and spending law signed on July 4, 2025. It made the 2017 tax cuts permanent and added new deductions and credits, most of them starting with 2025 returns.
Did the tax brackets change?
No. The seven rates, from 10% to 37%, stay the same and are now permanent. The brackets still rise with inflation each year.
Who gets the new senior deduction?
Each person 65 or older by the end of the year can deduct up to $6,000 for 2025 through 2028, on top of the standard deduction or itemized deductions. It is reduced by 6% of income above $75,000 ($150,000 filing jointly) and is not available when married filing separately.
Do I still pay Social Security and Medicare on tips and overtime?
Yes. The tips and overtime deductions lower your income tax only. Social Security and Medicare taxes still apply, and married couples must file jointly to claim them.
Who can deduct car loan interest?
Anyone with a loan taken out after 2024 for a new car, SUV, van, pickup or motorcycle for personal use, with final assembly in the U.S. Up to $10,000 a year counts, through 2028, whether or not you itemize.
How do I know if I should itemize?
Itemize when your state and local taxes (up to the cap), mortgage interest, gifts to charity and other itemized deductions add up to more than your standard deduction. The calculator picks the larger one for you.
Is this the same as my refund estimate?
No. This calculator compares two versions of your 2025 federal income tax to show what the law changed. For your refund or what you may owe, use our Tax Calculator.
More tax calculators and money-saving tools
See all tax tools- Tax CalculatorSee your estimated refund, or what you may owe, for this year or last.
- Tax Bracket CalculatorFind your federal tax bracket and your effective tax rate.
- W-4 Withholding CalculatorCheck the tax taken out of your paycheck and see what to change on your W-4.
- Self-Employed Tax CalculatorEstimate your self-employment tax, income tax and quarterly payments.
- Crypto Tax CalculatorWork out the gain or loss, and the tax, on a crypto sale.
- Self-Employed Tax Deductions CalculatorFind the write-offs for your line of work, and what they save you.
Make the most of the new tax law
Our tax experts can make sure you get every new deduction and credit you qualify for, and prepare and file your return.
These calculators give estimates of federal tax for planning, not tax advice. Pinnacle Tax Professionals confirms the final numbers when we prepare your return.
