Did You Know? One Big Beautiful Bill Changes for Tax Year 2025

Taxes can be confusing, but some changes can actually help you save money. The table below shows what’s new in 2025, who it affects, and how it can lower your taxes. Check it out to see the updates that might help you and your family. Jump to the full article.

Change	What’s New	How It Helps You
Lower Tax Rates Stay	2017 lower tax brackets are now permanent	Most people won’t see higher taxes in 2026
Bigger Standard Deduction	+$750 for single, +$1,125 for head of household, +$1,500 for married joint	Lowers your taxable income if you don’t itemize
Extra Deduction for Seniors	Age 65+ can claim up to $6,000 extra	Reduces taxes for older adults (some high earners may get less)
Higher SALT Deduction Limit	State & local tax deduction cap raised to $40,000 (2025–2029)	High-tax state residents can lower taxable income more if they itemize
Child Tax Credit Increase	$2,200 per child under 17	Families pay less in taxes
Tips & Overtime Deductions	Tips and overtime partially deductible (limits apply)	Can lower taxable income if you work tipped or overtime jobs
Auto Loan Interest Deduction	Up to $10,000 interest deductible on new U.S.-made cars (2025–2028)	Can reduce taxes if you bought a qualifying car loan
Expiring Credits	Clean energy credits end 12/31/2025, EV credits end 9/30/2025	Act in 2025 to claim these before they expire
1099 & Reporting Changes	More 1099s may be issued, some old deductions removed	Keep track of income and deductions carefully

Quick Tips for 2025 Tax Year

• Bigger deductions and credits usually mean lower taxes

• Some changes are temporary, so timing matters

• Keep good records for tips, overtime, auto loans, and deductions

• High-income earners may see reduced benefits

Full Article

Taxes are changing in 2025! Here are the key updates from the One Big Beautiful Bill (OBBBA) that could affect your tax return:

1. Lower Tax Rates Stay

The lower income tax rates from 2017 will stay in place. This means most people won’t see their taxes go up in 2026 — your 2025 taxes use the same lower rates.

2. Bigger Standard Deduction

The standard deduction is going up:

• $750 more for single filers and married filing separately

• $1,125 more for heads of household

• $1,500 more for married filing jointly

This means you can lower your taxable income even more if you don’t itemize.

3. Extra Deduction for Seniors

If you are 65 or older, you can claim an extra “bonus” deduction of up to $6,000. This helps reduce taxes for older adults, but high earners may get less.

4. Higher State and Local Tax Deduction Limit

The limit on state and local tax deductions (SALT) is temporarily raised from $10,000 to $40,000 for 2025–2029. If you live in a high-tax state and itemize deductions, you could lower your taxable income a lot more.

5. Bigger Child Tax Credit

The child tax credit goes up to $2,200 per child under 17. Families with kids may pay less in taxes because of this.

6. New Deductions for Tips & Overtime

• Workers in tipped jobs can deduct some of their tips.

• Overtime pay may also be partially deductible (up to $12,500 for 2025–2028).

These changes can lower taxable income, but limits apply.

7. Auto Loan Interest Deduction

You may be able to deduct up to $10,000 in interest on new U.S.-made car loans bought in 2025–2028. Rules and income limits apply.

8. Expiring Credits

Some credits and deductions end after 2025:

• Clean energy credits expire December 31, 2025

• Electric vehicle credits expire September 30, 2025

• Other deductions may no longer be allowed

If you plan to use them, act in 2025 to qualify.

9. 1099 and Other Reporting Changes

Some 1099 reporting rules are changing. More companies may need to send you 1099 forms, and some old deductions might no longer be allowed.

What This Means for You

• Lower taxes: Bigger deductions and credits usually mean paying less tax.

• Timing matters: Some deductions and credits expire, so you may need to act in 2025.

• Phaseouts exist: High earners may see some benefits reduced.

• More paperwork: New deductions mean you’ll need to track tips, overtime, auto interest, and other items carefully.

• Temporary rules: Some changes are only for a few years. Plan for now and the future.

Footnotes / Sources

1. IRS Newsroom. One, Big, Beautiful Bill provisions. https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

2. IRS. One, Big, Beautiful Bill Act: Tax deductions for working Americans and seniors. https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors

3. IRS. FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21. https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21

4. IRS. How to update withholding to account for tax law changes for 2025. https://www.irs.gov/forms-pubs/how-to-update-withholding-to-account-for-tax-law-changes-for-2025

5. IRS. Publication 6961 (Rev. 9-2025). https://www.irs.gov/pub/irs-access/p6961_accessible.pdf

6. IRS. Internal Revenue Bulletin: 2025-38. https://www.irs.gov/irb/2025-38_IRB

7. Congress.gov. H.R.1 - One Big Beautiful Bill Act 119th Congress (2025-2026). https://www.congress.gov/bill/119th-congress/house-bill/1

Why Most Small Businesses Don’t Actually Need a CPA

Let’s bust a myth: Most small businesses don’t need a CPA on speed dial.
What they really need is clean, consistent bookkeeping.

CPAs Are Specialists

I respect CPAs. They’re experts in mergers, compliance, and audits. But day-to-day? That’s not their wheelhouse. Most small business owners aren’t dealing with mergers or IRS audits on a regular basis. They’re just trying to understand their numbers and make sure the bills get paid¹ ².

The Real Foundation: Bookkeeping

Without accurate books, a CPA can’t do much anyway. Bookkeeping is the unsung hero of financial management. It’s what keeps your numbers clear, your cash flow visible, and your stress levels down³.

Cost Matters

CPAs charge CPA rates. And that’s fair — they’ve earned it. But if you’re paying those rates for monthly reconciliations, you’re overspending. A professional bookkeeper can handle the daily financial tracking at a fraction of the cost⁴ ⁵.

The Smart Combo

The businesses I see thriving have a simple system:

• A bookkeeper who keeps everything accurate month-to-month

• A CPA who steps in for IRS audits (or for specialized strategy)

It’s efficient. It’s cost-effective. And it works³ ⁵.

If you’re a small business owner losing sleep over your books, you probably don’t need a CPA. You need a partner who understands small business bookkeeping and keeps you organized year-round.

That’s what we do at Sisters’ Community Bookkeeping — in the community, for the community.

References

1. Indeed. “Bookkeeper vs. Accountant vs. CPA: How Are They Different?”

2. Rightworks. “Bookkeeper vs. Accountant: Your Complete Guide …”

3. LegalZoom. “Bookkeeper vs. Accountant: What’s Right for Your Business?”

4. Smith.ai. “How Much Does a CPA Charge for Bookkeeping for a Small Business?”

5. GrowthForce. “How Much Do Bookkeeping Services for Small Businesses Cost?”

Free Guide: 5 Bookkeeping Mistakes Small Businesses Make

Strong bookkeeping isn’t just about staying compliant with the IRS — it’s about creating a clear picture of your business so you can make confident financial decisions. Unfortunately, many small business owners unintentionally make bookkeeping mistakes that cost them time, money, and peace of mind. Here are the five most common bookkeeping mistakes small businesses make — and how you can avoid them.

Mixing Personal and Business Finances

It may seem harmless to swipe your personal card for a business expense (or vice versa), but mixing funds makes it nearly impossible to track profitability and complicates taxes¹.
Fix it: Open a dedicated business checking account and always separate spending.

Waiting Until Tax Season to Organize Records

Too many business owners pile receipts in a shoebox or wait until March to touch their books. This leads to missing expenses and higher accounting fees².
Fix it: Stay on top of your books monthly using tools like QuickBooks Online or Dext.

Not Reconciling Accounts Regularly

If you’re only glancing at your bank balance, you’re not really seeing your financial picture. Reconciling accounts helps you catch errors and fraud early³.
Fix it: Reconcile your bank and credit card accounts every month to prevent costly surprises.

Misclassifying Expenses

Coding expenses to the wrong categories makes your financial reports inaccurate and results in missed deductions⁴.
Fix it: Learn the basics of a proper chart of accounts — or hire a bookkeeper who already knows how.

Doing It All Yourself

Many small business owners try to save money by managing their books on their own. But mistakes add up quickly. Hiring a professional can save you time, stress, and money in the long run⁵.
Fix it: Delegate bookkeeping to a professional so you can free up time and gain accurate insights.

Bookkeeping mistakes may seem small at first, but they add up to lost time, higher costs, and missed opportunities. By avoiding these five common pitfalls — and getting support where you need it — you’ll build a strong financial foundation for your business.

■ Want stress-free bookkeeping? Sisters’ Community Bookkeeping helps small business owners stay organized, save money, and feel confident about their numbers. Contact us today to see how we can help.

References

1. Pilot. “Top 10 Bookkeeping Mistakes Small Businesses Make.” (2025)

2. Block Advisors. “Avoid These Bookkeeping Mistakes as a Small Business.”

3. Investopedia. “Why Is Reconciliation Important in Accounting?”
   Bill.com. “Account Reconciliation: Definition, Types & Best Practices.”

4. Pilot. “Top 10 Bookkeeping Mistakes Small Businesses Make.”
   SVA Accountants. “Avoid 8 Common Accounting Mistakes for Small Businesses.”

5. SVA Accountants. “Avoid 8 Common Accounting Mistakes for Small Businesses.”
   Pilot. “Top 10 Bookkeeping Mistakes Small Businesses Make.”