How the 2025/2026 “Big Beautiful Bill” could affect your taxes is a question on many people’s minds now that the new reform has been signed into law. From higher standard deductions to expanded credits for families and small businesses, the bill introduces several changes aimed at easing the financial burden for everyday taxpayers. Whether you’re filing as an individual, supporting a family, or running a business, it’s worth understanding how these updates might benefit you.
Here’s a clear, down-to-earth breakdown of what’s in the bill, how it affects people across income levels, and what small business owners and low-to-middle-income families need to know.
What Is the “Big Beautiful Bill”?
The BBB is a sweeping federal tax reform package aimed at simplifying the tax code, supporting economic growth, and offering more breathing room to low-income families and small to mid-sized businesses (SMEs/SMBs). While some elements may still evolve, the core changes are now locked in for the 2025/2026 tax years.
For Individuals and Families
1. Larger Standard Deduction
- The standard deduction has been increased again and this is great news for those who don’t itemize.
New Amounts (2025):- Single filers: $16,500
- Married filing jointly: $33,000
Tip: If you usually don’t have enough deductions to itemize, this increase means more of your income is automatically shielded from tax.
2. Expanded Child Tax Credit
- The Child Tax Credit is now $2,500 per child under 17, and it’s fully refundable for many low-to-middle-income households.
- There’s also a $1,000 Young Adult Credit for dependents ages 17–20 who are still in school or training.
Tip: If you have kids or dependents, update your W-4 with your employer to take home more money each paycheck.
3. Earned Income Tax Credit (EITC) Boost
- The BBB expanded eligibility and increased the credit amounts for workers without children and for those in caregiving roles or gig work.
Tip: Even if you don’t owe taxes, file a return – you could qualify for a refund of $500–$2,000.
4. New “Essential Needs Credit”
- A new refundable credit for households earning under $45,000 (single) or $65,000 (married) to help offset inflation’s effect on groceries, utilities, and rent.
For Small and Mid-Sized Businesses (SMEs/SMBs)
This is where the bill really shines. Lawmakers clearly wanted to help small businesses stay strong and grow in today’s economy.
1. Lower Corporate Tax Rate for SMBs
- If your business earns under $2.5M in net income, your federal tax rate drops from 21% to 18%.
Tip: Now is a great time to review your business structure. Some sole proprietors or LLCs may benefit from electing S-Corp status to maximize tax savings.
2. New Deduction for Employee Training
- Businesses can now deduct up to 150% of costs spent on workforce training, certifications, and employee upskilling programs.
Tip: Invest in your team. This deduction makes staff development even more valuable.
3. Startup Credit Expansion
- The BBB significantly boosts the Startup Business Credit, now up to $12,000 over the first two years, especially for minority-owned and rural businesses.
Tip: If you’re just launching, keep detailed records of startup expenses and talk to your tax advisor early.
4. Gig Worker-Friendly Rules
- Simplified filing and tax calculation methods for self-employed, freelance, and gig economy workers. Plus, better access to retirement savings options with new tax breaks.
Tip: You can now write off more business-related expenses, even if you’re part-time or doing side gigs.
For Everyone: Other Notable Updates
- Green Incentives: Bigger credits for solar panels, electric vehicles (now including used EVs), and home energy improvements.
- Education Savings: Expanded use of 529 plans — now covers apprenticeships, vocational training, and even some career-switching programs.
Healthcare Write-Offs: The threshold for deducting out-of-pocket medical expenses has been lowered, helping families with large medical bills.
What’s NOT in the Bill?
No changes to Social Security tax rules or Medicare surcharges at this time. Capital gains rates remain the same — for now.
Final Thoughts: Opportunities & Action Steps
The Big Beautiful Bill lives up to its name in one key way: it opens real opportunities for everyday people and entrepreneurs.
Here’s what you can do now:
- Schedule a tax check-in before the end of 2025 to make sure you’re set up to take advantage of the changes.
- Update your withholdings and estimated tax payments to avoid surprise bills or missed refunds.
- Invest in your business or future – through training, energy-efficient upgrades, or savings plans, while the credits are hot.
At Rocket Tax in Brooklyn NY, we’re here to help you make the most of these changes. Whether you’re a parent, a business owner, or both, let’s work together to keep more of your money in your pocket.
Need help navigating the new tax rules?
Book an appointment online: https://rockettaxpros.com/contact-us/. Let’s make this new tax season work for you.