On July 4, 2025, new tax legislation was signed into law as part of H.R. 1, One Big Beautiful Bill Act (OBBBA) – introducing major updates to the tax code while preserving and expanding many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025.
With tax changes big and small, it can be challenging to sort through what’s accurate and what applies to your financial situation. While some details are still being finalized, here’s a big picture of the most important changes you should be aware of for your tax planning considerations.
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Individual and trust income tax brackets
The current seven federal tax brackets – 10%, 12%, 22%, 24%, 32%, 35% and 37% -- are now permanent1. High-income earners taxed at 37% were scheduled to see that tax rate change in 2026, but with the passage of H.R.1, One Big Beautiful Bill Act (OBBBA), it extended the individual tax rates from the TCJA, keeping the highest rate at 37%.
Capital gains tax rates
Today, single individuals can qualify for the 0% long-term capital gains rate with a maximum taxable income of $48,350, while married couples filing together are eligible with a maximum income of $96,7002. These rates are decoupled from ordinary income brackets.
Capital gains tax rates for 2025
| Tax rate | Single | Head of household | Married filing jointly | Married filing separately |
|---|---|---|---|---|
| 0% | $0 to $48,350 | $0 to $64,750 | $0 to $96,700 | $0 to $48,350 |
| 15% | $48,351 to $533,400 | $64,751 to $566,700 | $96,701 to $600,050 | $48,351 to $300,000 |
| 20% | $533,401 or more | $566,701 or more | $600,051 or more | $300,001 or more |
Standard deduction
Many people will use the standard deduction to simplify their tax filings, especially if they don’t have enough expenses to itemize. In 2017, the standard deduction was $6,500 for single tax filers and $13,000 for married couples filing jointly. Then came TCJA, which nearly doubled those amounts.
Now, H.R.1, One Big Beautiful Bill Act (OBBBA) makes permanent the higher deduction levels from TCJA -- $15,750 for single tax filers and $31,500 for married couples filing together3. And because these amounts are indexed for inflation, taxpayers won’t face a sudden drop in 2026 that was originally anticipated under the TCJA sunset rules.
2025 standard deductions
The filing status and deduction set by the IRS for tax year 20251:
- Single: $15,750
- Married filing jointly: $31,500
- Head of household: $23,625
- Additional amount for married seniors: $12,000
- Additional amount for unmarried seniors: $6,000
Child Tax Credit
The Child Tax Credit (CTC) has also been permanently increased under H.R.1, One Big Beautiful Bill Act (OBBBA). For 2025 tax returns, the child tax credit is worth up to $2,200 for each qualifying child under the age of 17, up from $2,000 in 20244. The refundable portion, also known as the Additional Child Tax Credit (ACTC), is $1,700 for each qualifying child4. The income phaseout thresholds of $200,000 for single filers and $400,000 for joint filers are also made permanent.
Alternative minimum tax
The alternative minimum tax (AMT) is designed to ensure that high-income taxpayers pay a minimum amount of tax, even if they qualify for certain deductions or credits. This is certainly an area where an advisor can provide valuable guidance, especially for individuals with multiple deductions and complex financial situations.
For 2025, the AMT tax exemption increased to $88,100 for single individuals ($68,650 for married couple filing separately) and begins to phase out at $626,350. AMT has only two tax rates: 26% and 28%5.
Alternative minimum tax for 2025
| Filing status | Maximum exemption amount | Income exemption phaseout threshold/th> |
|---|---|---|
| Married filing jointly | $137,000 | $1,252,700 |
| Single or head of household | $88,100 | $626,350 |
| Married filing separately | $68,500 | $626,350 |
State and local taxes
With the passage of the H.R.1 One Big Beautiful Bill Act (OBBBA), it temporarily raises the maximum SALT deduction from $10,000 to $40,000 for single and joint filers, but with a few caveats3:
- The full deduction starts to phase out for individuals making more than $500,000 ($250,000 for a married individual filing separately.
- SALT deduction reverts to $10,000 for incomes of $600,000 or more.
- SALT deduction and phase out levels will increase by 1% annually through 2029, and revert to its $10,000 cap in 2030, with no income limits.
- For married couples who file separately, the full deduction increases to $20,000 and returns to its $5,000 cap in 2030.
Estate and gift tax exemptions
As things stand now, you can transfer up to $13,990,000 free of taxes during your lifetime and after you’ve passed through the gift and estate tax exemption6. However, this is just the federal estate tax, as many states have their own inheritance or estate taxes, so it’s important to know the laws where you reside.
Additionally, the IRS announced an increase in its annual gift tax exclusion for 2025, increasing to $19,000 per recipient, up $1,000 from 2024’s limit. In other words, you can give up to $19,000 – or up to $38,000 for married couples -- in cash or other assets to as many people as you wish without triggering gift tax reporting requirements.
What strategies should you consider?
With the estate and gift tax exemption set to increase to $15 million per individual -- $30 million for married couples – starting in 2026, now is a great time to revisit your estate planning strategy. There are still smart moves you can make today to take full advantage of the current and future exemption levels.
One option is to fund irrevocable trusts or make outright gifts that remove appreciating assets from your taxable estate. Not only does this help reduce future estate tax exposure, but any growth on those assets also escapes taxation—potentially saving your heirs a significant amount.
A popular strategy is the Spousal Lifetime Access Trust (SLAT). It allows you to use your gift tax exemption now while still providing your spouse access to the assets. This can offer flexibility if your financial needs change, while keeping the assets outside your estate for tax purposes.
We can help
The signing of H.R.1 One Big Beautiful Bill Act (OBBBA) into law brought about major tax changes, as well as creating a more predictable environment for estate planning. Whether you’re thinking about gifting strategies, trust structures, or just want to make sure your current plan still fits your goals, we’re here to help.
Contact your Huntington team or find a location near you to learn how we can help you make the most of today’s opportunities and set your legacy up for success.
