How Will Your Tax Refund Look Under Trump’s Big Beautiful Bill?
Written by
Chris Adam
Edited by
Rebekah Evans
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As if figuring out taxes isn’t confusing enough, President Donald Trump’s One Big Beautiful Bill Act (OBBBA) may mean some significant changes for many taxpayers. On the positive side, it could mean you see a lower tax bill this season.
“For the average American, the OBBBA will mean they pay less in taxes,” said Melanie Musson, finance expert with Quote.com. “Regardless of whether you argue that you should get more back or others get more than you, the fact is that most Americans are going to get more back or owe less, depending on the situation.”
Here’s how your tax refund may look under the OBBBA.
Changes for Families and Workers
Brandon Gregg, certified financial planner (CFP) and advisor with BBK Wealth Management, pointed to the following changes tied to the OBBBA that may impact your tax refund.
- Child Tax Credit: The credit is permanently increased to $2,200 ($1,700 is refundable).
- No Tax on Overtime Deductions: For people who work overtime, a deduction up to $12,500 for single filers and $25,000 for joint filers is available.
- Senior’s Deduction: Taxpayers over 65 can take an additional $6,000 deduction over their standard deduction.
Gregg noted that exact savings will be different for each person depending on their financial situation. He suggested getting an idea of your savings using an online tax calculator, where you can easily plug in your information and see how the new changes may affect your tax situation.
Changes To the Tax Code
“The OBBBA also makes permanent the 2017 Tax Cuts and Jobs Act (TCJA) tax brackets with annual adjustments for inflation,” said Marguerita Cheng, CFP and CEO of Blue Ocean Global Wealth. “The OBBBA also contains new provisions such as no federal tax on tips, overtime pay and Social Security benefits for older Americans, which can reduce further reduce the tax liability for many individuals.”
According to Marcus Sturdivant Sr., managing member of The ABC Squared, most Americans will see a larger cut, though not all will see a refund and the lower the tax bracket, the more regressive the tax breaks are in nature.
“The OBBBA added some tax cuts and deductions, but mainly it added structure and codified the tax code, for now,” Sturdivant said. “Tax codes favor investing over short-term gains, so continue to invest and make strategic withdrawals if needed, time in the market over timing the market.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
