Tax Implications for Married Couples - Being married allows couples to share a tax return, claim a larger standard deduction, and often pay less overall compared to filing individually [1] - Certain credits and deductions designed for single filers or specific groups may not apply to married couples [1] Filing Status and Deductions - The Head of Household (HOH) filing status is exclusive to single filers who support a qualifying dependent, making married couples ineligible [2] - For 2025, the standard deduction for HOH is $22,500, while married filing jointly (MFJ) is $30,000, and single filers or those married filing separately receive $15,000 [3] Earned Income Tax Credit (EITC) - The EITC is beneficial for lower-income workers, with stricter rules and lower income thresholds for married couples compared to single parents [4] - A single filer with three or more qualifying children can receive up to $8,046 in refundable credit, while married couples may exceed the income cutoff due to combined incomes [5] Saver's Credit - The Saver's Credit incentivizes retirement account contributions, with singles qualifying up to an AGI of $39,500, while the limit for married couples is $79,000 combined [6] - Singles can receive up to $1,000 back, whereas married couples can claim up to $2,000 combined, but many married households may not qualify due to combined income [6]

Tax Bill Overview - The House is expected to vote on President Trump's tax bill, likely resembling the Senate version [1][2] - Democrats argue the bill disproportionately benefits higher-income households [6] Income Group Impact - The bottom 20% could see a decrease in after-tax income of approximately $560 per year, equivalent to a 23% decline [3] - The middle 20% might experience a slight increase of about $760 annually, representing a 15% rise in after-tax income [3] - The top 20% could receive a tax cut of around $6000, approximately a 23% increase [4] - The top 1% may see a tax cut of about 21%, with benefits potentially declining at the very top due to income thresholds [4] Key Provisions & Costs - Extending the standard deduction is estimated to cost $14 trillion [5] - The child tax credit is valued at $800 billion [5] - Limiting taxes on tips and overtime amounts to over $120 billion [5] - Extending lower marginal tax rates is the most expensive component, exceeding $1 trillion [5] Beneficiaries - Approximately 80% of the benefits from the Senate bill are projected to go to the top 10% of earners [2][6] - The top 10% contribute 70% of the taxes [6] - The working and middle classes are expected to benefit from provisions like the standard deduction and child tax credit [7] Business Impact - Immediate expensing of R&D and capital investment is considered the most economically significant aspect for businesses [7]

Core Points - The article discusses the decision-making process for taxpayers regarding whether to take the standard deduction or itemize deductions during tax season, highlighting that over 90% of taxpayers choose the standard deduction [1][2] - It introduces the One Big Beautiful Bill Act (OBBB), which includes significant changes to deductions for the tax years 2025 through 2028, particularly for taxpayers aged 65 and older [2][5] Standard Deduction - The standard deduction simplifies tax filing by providing a fixed amount deducted from taxable income based on filing status, adjusted annually for inflation [2][3] - Additional standard deductions are available for taxpayers who are blind, disabled, or over 65, with specific amounts for 2025 [4][5] - The OBBB increases the additional standard deduction for seniors, allowing up to $23,750 for single filers and $46,700 for married couples filing jointly if they are 65 or older [5] Itemized Deductions - Itemized deductions allow taxpayers to select individual deductions that may result in a lower tax bill compared to the standard deduction, but taxpayers must choose one method [6][7] - Common itemized deductions include unreimbursed medical expenses, mortgage interest, charitable contributions, property taxes, and casualty losses [10][12][13][15][17] - The OBBB introduces temporary deductions for tax years 2025 through 2028, including increased SALT deductions and new deductions for car loan interest and overtime pay [16] Changes Under OBBB - The OBBB permanently increases the standard deduction amounts and introduces new deductions, significantly impacting taxpayers' decisions on whether to itemize or take the standard deduction [18] - The law phases out additional standard deductions for seniors based on income thresholds, affecting eligibility for the standard deduction altogether [6] Tax Filing Considerations - Taxpayers must evaluate their eligibility for various deductions and consider the potential benefits of itemizing versus taking the standard deduction [9][20] - The article emphasizes the importance of understanding the rules for allowable deductions and maintaining proper documentation to avoid audits [26][27]

Core Insights - The stock market performed well in 2025, with the S&P 500 gaining approximately 18%, the Dow Jones Industrial Average increasing nearly 13%, and the Nasdaq rising close to 21% [1] - Social Security recipients received a cost-of-living adjustment (COLA) of 2.5% for 2025, which may affect the taxability of their benefits [2] Tax Strategies for Retirees - **IRA Contributions**: Retirees can reduce taxable income by contributing to a non-Roth IRA, even if they have earned income from part-time work [3][4] - **Health Savings Account (HSA)**: Contributions to an HSA can be made tax-free if covered by a high-deductible health plan, allowing for tax-free growth and withdrawals for qualified healthcare expenses [5][6] - **Standard Deduction**: For tax year 2025, the standard deduction is $31,500 for married couples filing jointly and $15,750 for single filers, which may exceed itemized deductions for many taxpayers [7][8] - **State and Local Tax Breaks**: Some states offer tax deductions for contributions to 529 education accounts and other tax breaks for seniors [9][10][11] - **Required Minimum Distributions (RMDs)**: Retirees must take their first RMD by age 73, with options to defer it, which can impact taxable income [13][14] - **Qualified Charitable Distributions (QCDs)**: Retirees aged 70½ or older can donate up to $108,000 from their IRA to charity, which counts toward RMDs and is not subject to federal taxes [15][16][17]