In July 2025, the president signed the “One Big Beautiful Bill Act” into law. This new law makes many changes to how we all pay taxes. Some of these changes are significant, especially for people living in New York.
Remember, you are not alone in figuring this out. Our team of experienced New York tax attorneys is here to answer your questions. We offer a free consultation where you can speak directly with a lawyer who can help with your specific situation.
Personal Tax Changes in 2025: Brackets, Deductions, and Credits
The new law changes the taxes that most people pay every year. These are called individual income taxes. Many of the changes come from an older law, the Tax Cuts and Jobs Act (TCJA) of 2017. Most of those tax cuts were due to end in 2025. The new law makes many of them permanent.
Permanent Federal Tax Brackets for 2025 and Beyond
Your tax rate is the percentage of your income that you pay in taxes. The United States has a tax system with different levels, or brackets. The new law keeps the seven tax brackets from the old law. They are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. This means that if your income stays the same, your tax rate will likely stay the same, too. The income levels for these brackets are adjusted each year for inflation, which is the normal rise in prices for goods and services. The Internal Revenue Service (IRS) provides these updates every year.
Increased Standard Deduction in 2025 and New Relief for Seniors
When you file your taxes, you can lower your taxable income in one of two ways. You can itemize deductions (list them all out) or take the standard deduction. The standard deduction is a set dollar amount that you can subtract from your income. Most people use the standard deduction because it is easier and more straightforward.
The new law makes the higher standard deduction permanent. It also gives it another boost. For 2025, the standard deduction is much larger. This is good news because a bigger deduction means less of your income is taxed.
There is also a special new deduction for seniors. If you are 65 or older, you may be able to take an extra deduction. This can help lower the tax bill for many retired New Yorkers.
More Help for Families: The Child Tax Credit
The Child Tax Credit is a special tax credit for parents. A tax credit is even better than a deduction. It lowers your actual tax bill dollar for dollar. The new law increases this credit for parents.
Previously, the credit was $2,000 per child. Now, it is $2,200 per child. The law also makes this credit permanent and says it will increase with inflation in the future. This means more money back for families with children. To get this credit, your child must have a Social Security number.
A Major Win for New Yorkers: The SALT Deduction Cap
This is one of the biggest changes for people in our state. The SALT deduction lets you deduct the state and local taxes you have already paid from your federal income. This includes property taxes, state income taxes, or sales taxes.
For people in New York, these taxes can add up to a lot of money. A few years ago, a new rule put a $10,000 cap on this deduction. This hurt many New York families, especially homeowners, who often pay much more than $10,000 in state and local taxes. For more information on what taxes you can deduct, you can visit the New York State Department of Taxation and Finance.
The new 2025 tax law changes this. The SALT deduction cap has been temporarily raised to $40,000 for married couples who file their taxes together. This change lasts from 2025 through 2029. This is a very important change that could save many New Yorkers thousands of dollars on their federal tax bills. If you own a home or pay high state income taxes, this change is for you. An experienced tax attorney can help you figure out how to best use this bigger deduction.
New Tax Breaks for Workers and Givers
The 2025 tax law also created some brand-new ways for people to lower their taxes. These changes affect millions of workers in the service industry and those who work extra hours.
Tax-Free Tips for Service Workers
If you work in a restaurant, hotel, or another job where you receive tips, this is a big change. Under the new law, your tips can now be free from federal income tax. This is a huge benefit that puts more money directly into the pockets of hardworking people. The new rule has some limits, but it is a major change for the service industry.
A Tax Break for Overtime Pay
Many people work overtime to earn extra money for their families. The new law says that this extra pay could also be free from federal income tax. This change rewards people for their hard work and helps them keep more of what they earn.
Deduction for Car Loans
The law also adds a new, temporary deduction for interest paid on a car loan. If you buy a new, American-made car, you may be able to deduct the interest you pay on the loan. This is meant to encourage people to buy cars made in the USA. You can take this deduction even if you use the standard deduction.
A Reward for Giving to Charity
The new law also makes it easier to get a tax break for giving to charity. Before, you could only deduct charitable donations if you itemized your deductions. Now, there is a permanent deduction for giving to charity, even if you take the standard deduction. This helps everyone get a small reward for helping others.
Business Tax Cuts in 2025: Key Changes for Owners
If you own a business, there are important changes for you, too. The law aims to help businesses grow and invest in themselves.
Permanent 100% Bonus Depreciation for Business Investments
A rule called “bonus depreciation” is now permanent. This sounds complicated, but the idea is simple. When your business buys new equipment, like computers or machinery, this rule lets you deduct the full cost of that equipment in the same year you buy it.
This is a big help for businesses. Instead of deducting a small part of the cost over many years, you get the full tax benefit right away. This frees up cash that you can use to grow your business, hire more people, or invest in new products. According to a report by the Associated Press, changes in business taxes can have a wide-reaching effect on the economy.
Permanent 20% QBI Deduction for Pass-Through Businesses
Many small businesses are set up as “pass-through” entities. This means the business profits are “passed through” to the owner and taxed on their personal tax return. The new law makes a 20% deduction for this type of business income permanent. This is called the Qualified Business Income (QBI) deduction. It helps lower the tax bill for millions of small business owners, from freelancers to local shop owners. For details on your personal income tax obligations, it’s always good to check with New York’s official resources.
2025 Estate and Gift Tax Changes: Higher Exemptions for Families
The new law also changes the rules for estate and gift taxes. The estate tax is a tax on the property and money you leave to others when you pass away.
The law greatly increases the amount of money you can leave behind tax-free. This is called the estate tax exemption. The exemption is now $15 million for one person or $30 million for a married couple. This means that most families will not have to worry about paying any federal estate tax. This is a very helpful change for people who want to pass on their family business or farm to the next generation without a large tax bill. You can learn more about how New York handles estate taxes on its official website.
The gift tax exclusion, which is the amount you can give someone each year without paying tax, has also been set for 2025.
How the 2025 Tax Law Affects New York Taxpayers
These new tax laws can feel like a lot to take in. The main idea is that many people and businesses will see their tax bills go down. However, the exact amount depends on your personal situation. It depends on your income, if you have children, if you own a home in New York, and if you own a business.
While news of tax cuts can be exciting, it is important to plan carefully. Organizations like the Tax Foundation often analyze how these changes affect the country’s budget over the long term. For you, the important thing is to understand how the new rules apply to your life.
Why You Need a Tax Attorney for the 2025 Tax Changes
Tax laws can be tricky. Even a small mistake can lead to problems with the IRS or the New York State Department of Taxation and Finance. That is why having an experienced New York tax lawyer on your side is so important.
At Thorgood Law Firm, we help people just like you every day.
- Tax Planning: We can look at your financial situation and help you make a plan to take full advantage of the new tax cuts.
- Audit Help: If the IRS decides to audit you, it can be scary. Our attorneys can represent you and protect your rights.
- Solving Tax Debt: If you owe back taxes, we can explore options like an Offer in Compromise or an Installment Agreement to help you get relief.
- Business Tax Issues: We help business owners with all kinds of tax issues, from payroll tax problems to sales tax audits.
The new 2025 tax laws offer many opportunities. But to make the most of them, you need a clear plan. Our experienced New York tax attorneys can give you that clarity and confidence.
Get a Free Consultation With a New York Tax Attorney
We know that dealing with taxes is stressful. Our firm was built to help people find freedom from their tax troubles. For over two decades, our New York tax attorneys have provided real solutions for our clients. We offer personalized service because we know every client’s situation is unique.
Your first consultation with us is always free, and you will speak directly with a lawyer. Don’t let confusion about the new tax laws cause you to worry. Let us help you understand what they mean for you and your family.
Contact us today to schedule your free consultation. You can also visit our offices at 100 Park Avenue 16th Floor New York, NY 10017. Let our experience work for you.
