Bjorn Swanson
The New Tax Law is Passed. Here's What It Means for You
Jul 24, 2025
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4th, and if you're wondering whether it matters — it does. In the tax world, this is the big one. It changes a lot, clarifies even more, and cuts some things entirely.
Honestly, I went back and forth on how best to get this in your hands: fast enough to matter, but clear enough to trust. Here’s what I landed on — a straight-shooting summary of the key takeaways, with deep dives to follow on topics for families, farmers, small businesses, and estate planning.
Let’s walk through what matters most:
🔒 Tax Rates Are Locked In — For Now
The current tax brackets — 10%, 12%, 22%, 24%, 32%, and 35% — were set to expire after 2025. That’s off the table. They're now permanent, at least until Congress decides to change them again.
What this means for you: You now have clarity. Whether you’re Roth converting, deferring income, planning a retirement draw, or simply budgeting for next year — we finally have a stable foundation to plan from.
🚜 Section 179 and Bonus Depreciation Supercharged
This bill enhances your ability to write off big purchases — think equipment, cows, vehicles, or improvements. You can expense more upfront (Section 179) and use 100% bonus depreciation for new property, permanently.
What this means: Need that new baler, welder, or work truck? You'll get immediate tax benefit, helping offset income and improve cash flow. This is huge for farms, trades, and local businesses.
💵 Tips & Overtime – New Exclusions, With Caveats
These were headline-grabbers, but let’s break them down realistically.
Tips:
You can now deduct up to $25,000 in reported tips from your income at tax time — if your employer reports them correctly, and if you do too. Social Security and Medicare still apply.
Overtime:
A new $12,500 deduction for properly reported overtime income — no extra hoops.
What this means: If your income includes reported tips or overtime, this may lower your tax bill. But if you’re off the books or underreporting, this doesn’t help you — and increases the audit risk.
🚗 Auto Loan Interest Is Now Deductible (For Some)
Starting in 2025, if your income is under $150,000 (single) or $300,000 (joint) and you buy a car — the interest on your loan is deductible.
What this means: A subtle win for working families, especially if your car is your commute, livelihood, or link to town.
👵 Bigger Standard Deduction for Seniors
Retirees get a bump in their standard deduction — subject to phaseouts.
What this means: If your income is modest, this may reduce your taxable income a little further. Unfortunately, Social Security is still taxable, and this won’t change that.
🧾 1099 Thresholds Finally Modernized
Raise your hand if you’re sick of $600 1099s. Me too.
The reporting threshold goes to $2,000, starting in 2025.
Third-party pay apps (Venmo, PayPal, etc.) return to the $20,000 / 200 transaction limit.
What this means: Less paperwork noise. More reasonable thresholds for freelancers, side hustlers, and small businesses. But a reminder — income is still income, whether you get a 1099 or not.
🏡 SALT Cap Expanded (Maybe It Helps, Maybe It Doesn’t)
The state and local tax deduction cap (SALT) was raised from $10,000 to around $40,000 through 2030.
What this means: If you itemize, pay state income tax, and own a more valuable home, this may benefit you. If you don’t itemize? It’s a non-factor.
👶 Child Tax Credit, Dependent Care Credit & HSA Changes
The Child Tax Credit and Dependent Care Credit are both enhanced — stay tuned for specifics.
HSAs now work with Bronze and Catastrophic plans — finally!
What this means: For many self-employed Montanans or those buying their own insurance, this change makes HSAs a realistic option, unlocking tax savings and better medical planning.
🚫 What Got Cut
Clean energy tax credits are gone — no more breaks for EVs, heat pumps, or energy-efficient appliances.
Personal exemptions are permanently repealed — families with 3+ kids still lose here.
Medicaid changes are substantial, especially for rural states like Montana. We’re tracking this closely.
What Comes Next
This is just the first pass. OBBBA is a landmark tax bill, and we’re going to keep distilling it down to what matters.
Next up:
Individuals: Rate planning, credits, medical, education
Farmers: Section 179, land sales, FSA changes
Businesses: Expensing, QBI, reporting
Estates: Gifting, trust, and exemption planning
📬 We might not wait for the next issue of Across the Divide — this could be our first-ever half-issue, dedicated solely to the OBBBA. If there was ever a moment to step back, reassess your plan, and ask the right questions — this is it.
As always, our job is to give you Clarity in the Details. Confidence in the Plan.
— Bjorn Swanson
Swanson Agency | Montana Roots. Future Focused.
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4th, and if you're wondering whether it matters — it does. In the tax world, this is the big one. It changes a lot, clarifies even more, and cuts some things entirely.
Honestly, I went back and forth on how best to get this in your hands: fast enough to matter, but clear enough to trust. Here’s what I landed on — a straight-shooting summary of the key takeaways, with deep dives to follow on topics for families, farmers, small businesses, and estate planning.
Let’s walk through what matters most:
🔒 Tax Rates Are Locked In — For Now
The current tax brackets — 10%, 12%, 22%, 24%, 32%, and 35% — were set to expire after 2025. That’s off the table. They're now permanent, at least until Congress decides to change them again.
What this means for you: You now have clarity. Whether you’re Roth converting, deferring income, planning a retirement draw, or simply budgeting for next year — we finally have a stable foundation to plan from.
🚜 Section 179 and Bonus Depreciation Supercharged
This bill enhances your ability to write off big purchases — think equipment, cows, vehicles, or improvements. You can expense more upfront (Section 179) and use 100% bonus depreciation for new property, permanently.
What this means: Need that new baler, welder, or work truck? You'll get immediate tax benefit, helping offset income and improve cash flow. This is huge for farms, trades, and local businesses.
💵 Tips & Overtime – New Exclusions, With Caveats
These were headline-grabbers, but let’s break them down realistically.
Tips:
You can now deduct up to $25,000 in reported tips from your income at tax time — if your employer reports them correctly, and if you do too. Social Security and Medicare still apply.
Overtime:
A new $12,500 deduction for properly reported overtime income — no extra hoops.
What this means: If your income includes reported tips or overtime, this may lower your tax bill. But if you’re off the books or underreporting, this doesn’t help you — and increases the audit risk.
🚗 Auto Loan Interest Is Now Deductible (For Some)
Starting in 2025, if your income is under $150,000 (single) or $300,000 (joint) and you buy a car — the interest on your loan is deductible.
What this means: A subtle win for working families, especially if your car is your commute, livelihood, or link to town.
👵 Bigger Standard Deduction for Seniors
Retirees get a bump in their standard deduction — subject to phaseouts.
What this means: If your income is modest, this may reduce your taxable income a little further. Unfortunately, Social Security is still taxable, and this won’t change that.
🧾 1099 Thresholds Finally Modernized
Raise your hand if you’re sick of $600 1099s. Me too.
The reporting threshold goes to $2,000, starting in 2025.
Third-party pay apps (Venmo, PayPal, etc.) return to the $20,000 / 200 transaction limit.
What this means: Less paperwork noise. More reasonable thresholds for freelancers, side hustlers, and small businesses. But a reminder — income is still income, whether you get a 1099 or not.
🏡 SALT Cap Expanded (Maybe It Helps, Maybe It Doesn’t)
The state and local tax deduction cap (SALT) was raised from $10,000 to around $40,000 through 2030.
What this means: If you itemize, pay state income tax, and own a more valuable home, this may benefit you. If you don’t itemize? It’s a non-factor.
👶 Child Tax Credit, Dependent Care Credit & HSA Changes
The Child Tax Credit and Dependent Care Credit are both enhanced — stay tuned for specifics.
HSAs now work with Bronze and Catastrophic plans — finally!
What this means: For many self-employed Montanans or those buying their own insurance, this change makes HSAs a realistic option, unlocking tax savings and better medical planning.
🚫 What Got Cut
Clean energy tax credits are gone — no more breaks for EVs, heat pumps, or energy-efficient appliances.
Personal exemptions are permanently repealed — families with 3+ kids still lose here.
Medicaid changes are substantial, especially for rural states like Montana. We’re tracking this closely.
What Comes Next
This is just the first pass. OBBBA is a landmark tax bill, and we’re going to keep distilling it down to what matters.
Next up:
Individuals: Rate planning, credits, medical, education
Farmers: Section 179, land sales, FSA changes
Businesses: Expensing, QBI, reporting
Estates: Gifting, trust, and exemption planning
📬 We might not wait for the next issue of Across the Divide — this could be our first-ever half-issue, dedicated solely to the OBBBA. If there was ever a moment to step back, reassess your plan, and ask the right questions — this is it.
As always, our job is to give you Clarity in the Details. Confidence in the Plan.
— Bjorn Swanson
Swanson Agency | Montana Roots. Future Focused.