One Big Beautiful Bill Act (OBBBA) Changes Relevant to Your Schedule A

The One Big Beautiful Bill Act (OBBBA) introduced a series of tax law updates that will directly affect how many taxpayers evaluate their 2025 returns. While some provisions take effect immediately for the 2025 tax year, others are scheduled to begin in 2026. Because these changes influence the decision to claim the standard deduction or itemize on Schedule A, it’s important to understand how they may impact your planning strategy. Even small shifts in deduction thresholds or phase-out rules can materially change your overall tax position.

Outlined below are several provisions that may influence how standard and itemized deductions are evaluated for the 2025 tax year. Please note, this is not an exhaustive list. It’s always best to consult a tax professional regarding your specific situation.

1. While not on your Schedule A, it is important to note that the standard deduction has increased as part of the OBBBA provisions. This is relative to the Schedule, A as this deduction amount sets the threshold for determining whether you take the standard deduction or itemize your deductions.
   1. For 2025, the standard deduction increases to $15,750 for single or married filing separately, $23,625 for heads of households, and $31,500 for married filing jointly.
   2. The standard deduction will increase for 2026 for inflation adjustments.
2. The State and Local Tax deduction, which has been capped at $10k, is now temporarily increased to $40k for tax years 2025 through 2029. As a result, you might notice a change on your 2025 tax return, as this change could make itemizing your deductions more beneficial than taking the standard deduction. There is a phase-out for those with AGI over $500k. The cap and the income threshold will increase annually
3. Whether taking the standard or itemized, taxpayers over 65 may be eligible for an additional $6,000 deduction. This deduction phases out for those with modified AGI over $75k ($150k for joint filers).
4. Miscellaneous itemized deductions are now permanently disallowed.

What This Means for Your 2025 Planning
Taken together, these changes may significantly alter the standard-versus-itemized deduction comparison for many taxpayers. The temporary increase in the SALT cap, combined with the higher standard deduction and additional deduction for certain taxpayers over 65, creates a new planning landscape for 2025. Taxpayers who previously defaulted to the standard deduction may want to revisit their numbers, while higher-income individuals should be mindful of phase-out thresholds that could limit the benefit of certain provisions.

Additionally, because several of these rules are temporary and subject to annual inflation adjustments, proactive planning will be especially important over the next few tax years. Reviewing your projected income, deductions, and filing status ahead of year-end can help determine the most advantageous approach under the updated law. As always, consultation with a qualified tax professional is recommended to evaluate how these provisions apply to your specific circumstances.

If you’re wondering how the OBBBA changes may impact your return, we can help. Schedule a consultation with our team today!