How Does New Legislation Impact Your Tax Bill?

November 6, 2025

The first half of 2025 was filled with plenty of reports of what legislation would be enacted with a new presidential administration. While there are still many items being discussed, July’s passing of H.R. 1 (formerly know as “One Big Beautiful Bill”) has locked in some significant new policies that everyone should be aware of when building their financial plans.

For those approaching or already enjoying retirement, there are some specific provisions that may be pertinent.

The new bill permanently extends the standard deduction first introduced in the Tax Cuts and Jobs Act instituted in 2018. It also provides an extra $750 to the standard deduction for single taxpayers and $1,500 for married couples in 2025 and adjusts those amounts for inflation yearly beginning in 20261.

The bill also adds an additional $6,000 deduction per individual for taxpayers 65 or older. This new deduction supplements a preexisting addition to the standard deduction for seniors of $2,000 for single filers and $1,600 per qualifying individual for married filers1.

For those who are still in the workforce, the new bill will also limit taxes owed on tips or overtime pay. From 2025-2028, dollar-for-dollar deductions can be made for overtime pay covered by the Fair Labor Standards Act. In this same timeframe, tips up to $25,000 can qualify for the same dollar-for-dollar deduction. Effective from 2025-2029, the State and Local Tax deduction cap is also raised to $40,0002.

  1. https://bipartisanpolicy.org/explainer/the-2025-tax-bill-additional-6000-deduction-for-seniors-simplified/
  2. https://www.hrblock.com/tax-center/irs/tax-law-and-policy/one-big-beautiful-bill-taxes/