Comprehensive Guide for Individuals, Families & Small Businesses

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) officially became law, bringing a wide range of tax changes that affect both individuals and small businesses for the upcoming tax season.
(White House)

Whether you file as an employee, a 1099 contractor, a family with dependents, or a business owner, these changes will influence your 2025 tax return, filed in early 2026.

Below is a detailed overview of the most important updates and what they mean for YOU.

1. Individual Income Tax Rates & Standard Deduction

Extended Lower Tax Rates

OBBBA makes permanent many of the income tax cuts first introduced under the Tax Cuts and Jobs Act (TCJA) in 2017.
(Wikipedia – OBBBA)

This means:

• Lower tax rates for most income brackets
• Higher take-home pay for many workers
• More favorable thresholds for married couples filing jointly

Higher Standard Deduction Continues

The increased standard deduction — originally temporary — is now permanent under OBBBA.

This benefits:

• Families with children
• Single filers
• Married couples
• Taxpayers who do not itemize deductions

If you’ve been claiming the standard deduction yearly, this is good news.

2. Updates to Credits for Families & Low-Income Workers

Child Tax Credit (CTC) Modifications

While the CTC does not return to pandemic-era levels, OBBBA adjusts:

• Eligibility requirements
• Phase-out thresholds
• Refundable portions for qualifying families

Some families may receive higher credits, while others may see adjustments depending on income.

Earned Income Tax Credit (EITC) Adjustments

The EITC remains one of the most impactful credits for workers with low to moderate income.

OBBBA updates:

• Income thresholds
• Credit amounts
• Age-based criteria

For many workers, especially single adults, these changes may result in a slightly higher credit.

References:
IRS Guidance on OBBBA-related provisions
(IRS.gov)

3. Important Updates for Self-Employed Individuals & Small Businesses

This is where your clients benefit MOST, Mary.

Business Deductions

OBBBA includes protections and extensions of deductions that help 1099 workers, LLC owners, and small business operators:

• Deduction for qualified business income (QBI)
• Higher limits for expensing equipment or business assets
• More favorable depreciation rules

✨ This can reduce taxable income significantly if documented correctly.

Treatment of Tips & Overtime

The OBBBA clarifies and expands how tips and overtime are reported and taxed:

• Better transparency for workers in hospitality and service industries
• Adjustments in how employers must report compensation

Reference:
(H&R Block)

Vehicle-Related Benefits

A portion of OBBBA includes adjustments for taxpayers who finance U.S.-made vehicles, impacting:

• Deductions for interest
• Access to credits in specific cases

4. Home Energy & Improvement Incentives

OBBBA works together with ongoing incentives from the Inflation Reduction Act to strengthen certain tax benefits, including:

• Credits for energy-efficient home upgrades
• Credits for installing solar energy systems
• Rebates or incentives for electric vehicles (certain criteria apply)

These credits can reduce your tax liability significantly if you made qualifying upgrades.

Reference:
(IRS – Energy Credits)

5. Higher Scrutiny From the IRS: More Audits & Document Verification

With expanded tax provisions, the IRS is focusing on:

• Accuracy of claims
• Income reporting
• Matching third-party documents (W-2, 1099, bank data)
• Correct use of credits and deductions

This makes professional tax preparation more important than ever.

Incorrect filings may lead to:

• Delayed refunds
• IRS letters requesting clarification
• Penalties or interest if there are mistakes

6. Why Filing Early Matters Under the New Law

OBBBA affects timing, verification, and credit eligibility.

Filing early helps:

• Resolve issues faster
• Avoid delays with the IRS
• Confirm eligibility for updated credits
• Prevent identity theft during tax season
• Secure earlier refunds for families who need them

What This Means for You (Mary’s client version)

At Charlotte Multiservice, we help individuals and businesses navigate these changes by:

✔ Reviewing how the new law affects your specific tax situation
✔ Identifying credits you may now qualify for
✔ Helping 1099 workers and LLC owners maximize deductions
✔ Ensuring your return is accurate under updated IRS rules
✔ Avoiding penalties or letters from the IRS
✔ Filing early to prevent delays

📞 Call us at (704) 900-6440
We’re ready to assist you with the 2025 tax season.

BOTTOM LINE (For quick understanding)

The One Big Beautiful Bill Act (OBBBA):

• Makes lower tax rates permanent
• Keeps a higher standard deduction
• Adjusts Child Tax Credit & EITC rules
• Helps small businesses through extended deductions
• Adds benefits for energy improvements and U.S.-made vehicles
• Increases IRS oversight and verification
• Makes early and accurate filing more important than ever

For many taxpayers, this means new opportunities — but also new risks if they file incorrectly.