Core Insights - The 2025 Reconciliation Legislation, known as the Big, Beautiful Bill (BBB), introduces significant tax changes that will affect middle-class taxpayers, including adjustments to income-tax brackets, deductions, and credits [1] Changes Expected - Middle-class taxpayers may experience local tax changes as states address budget deficits by expanding sales tax bases and increasing sales tax rates [2][3] - The Child Tax Credit will increase to a maximum of $2,200 in 2025, up from $2,000 in 2024, with this increase being permanent into 2026 and beyond [3] - Charitable contributions can now be deducted up to $1,000 for standard deduction taxpayers and $2,000 for married couples filing jointly, a change from previous rules that only allowed itemizers to deduct [3] - A new floor for deducting charitable contributions has been established at 0.5% of the taxpayer's adjusted gross income (AGI), meaning contributions up to this threshold are not deductible for itemizers [3] - Itemizers will see a 300% increase in state and local tax deductions, with a new limit of $40,000 through 2029, up from $10,000 in 2024, benefiting middle-class taxpayers in high tax areas [3] - Several new temporary deductions have been introduced, including deductions for overtime pay, tips, new vehicles manufactured in the U.S., and a $6,000 senior deduction, all set to expire after 2029 [3]