Your Wallet, Your Taxes: New Law's Impact Explained

Money Explainers

Get a breakdown of the new deductions and credits coming your way.Find out when and how the new tax law will affect your finances. Understand the key tax changes in President Trump's new bill. #BigBeautifulBill #TaxCuts2025 #FinancialUpdate

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00:00A major component of the recently passed One Big Beautiful Bill Act is a significant tax overhaul,

00:07representing the largest tax cut bill in years.

00:11While the legislation passed the House and Senate, the question on many Americans' minds is,

00:17when will these tax changes actually impact my wallet?

00:21Simply put, many of the changes will be felt in 2025.

00:25But you might not fully notice them until you file your taxes next year.

00:30The most substantial part of the Act makes permanent the current individual tax rates,

00:35which were initially reduced under the 2017 Tax Cuts and Jobs Act during President Trump's first term.

00:43These changes, which will be noticeable when people file their taxes in April 2026,

00:48include an increased cap on state and local tax deductions.

00:52This means most people won't see a change in their income taxes next year.

00:57Rather, the bill prevents an increase in rates that would have occurred had the legislation not passed.

01:03However, the bill does include several new provisions designed to bring more immediate relief to specific groups of taxpayers.

01:10Additionally, the bill introduces a $25,000 limit for deductions on tipped income,

01:17though this phases out for higher earners.

01:20For drivers, up to $10,000 in auto loan interest can now be deducted,

01:25specifically for new cars assembled in the United States, with income phase-outs.

01:30Seniors over 65 will also see a new $6,000 deduction,

01:36a direct outcome of President Trump's pledge to eliminate taxes on Social Security benefits.

01:41Lastly, the popular child tax credit has been increased from $2,000 to $2,200.

01:48These targeted changes aim to provide relief to specific subsections of taxpayers,

01:54a key promise from the Trump campaign.

01:56Money expires...

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