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Trump's One Big Beautiful Bill was signed into law in July of 2025, and provisions of the bill bring big changes to many taxpayers. From revised income brackets to expanded deductions and credits, millions of taxpayers could see unexpectedly larger refunds or face smaller tax bills when they file next year.
The updates are reshaping how much Americans owe, no matter where you stand financially. So, whether you're planning for retirement or have exited the workforce, here's a look at what changed, how it could affect you, and who stands to benefit the most.
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Millions could receive tax refunds next year
If you're needing to get out ot tax debt (amongst other scenarios), you could be in luck. Many workers are likely having too much withheld from their paychecks. This is because even though tax changes from the "One Big Beautiful Bill" are already in effect, the IRS hasn't updated its tax rate tables to match. As a result, millions could end up with larger tax refunds next year once the updated rules are fully reflected in official calculations.
Will you receive a refund?
It's possible that you may see some money back in your pocket. But, the taxpayers most likely to see bigger refunds are higher-income households, primarily the top 20% of earners, which generally includes those making more than $217,000 a year. Because these households pay more in federal income taxes overall, even small withholding mismatches can translate into noticeably larger refunds when the IRS updates its tables.
What high earners should expect
High earners are positioned to benefit the most from the new tax law, largely because they pay a higher share of federal income taxes and are more affected by rate and deduction changes. With expanded SALT deductions, updated brackets, and strengthened business provisions, many will see reduced taxable income and larger refunds. However, some benefits phase out at very high income levels, limiting the total impact.
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SALT cap deduction
The bill raises the state and local tax (SALT) deduction cap to $40,000, offering relief to taxpayers in higher-tax states. Under the change, households can deduct more of what they pay in state income and property taxes, reducing their federal taxable income.
This primarily benefits higher-earning homeowners who previously hit the $10,000 cap and saw limited value from itemizing. For many, the expanded cap can meaningfully lower their overall federal tax bill.
Child and family tax breaks expanded
When you're a parent, you may feel like you'll take any break you can get. And you may just get a bigger tax break in this case.
The bill enhances several credits aimed at families, including a larger Child Tax Credit and expanded eligibility for dependents. These changes mean more households qualify for higher, refundable benefits, which directly reduce tax liability or increase refunds. Families with multiple children, lower- to middle-income earners, and those with childcare expenses may see the biggest gains.
Overall, these updates make raising children slightly more affordable by putting more money back into parents' pockets.
Small business owners see targeted relief
Small business owners will benefit from enhanced deductions and expanded write-offs designed to reduce taxable income. The bill strengthens the qualified business income (QBI) deduction, allowing more entrepreneurs, freelancers, and pass-through entities to claim a larger percentage of their earnings tax-free.
Accelerated depreciation rules and increased expense limits also help businesses invest in equipment or growth at a lower after-tax cost. Together, these provisions aim to bolster small-business profitability and cash flow.
Impacts for homeowners and property taxpayers
Homeowners gain from changes that increase the value of mortgage-related deductions and offer more flexibility for property tax write-offs. The updated rules make it easier for homeowners, especially those in moderate- to high-tax areas, to reduce their federal taxable income.
Expanded SALT deductions and adjustments to mortgage interest limits mean many people who previously saw limited benefit from itemizing may now find it worthwhile. These changes can meaningfully lower annual tax burdens for property owners.
Potential drawbacks and limitations
While the bill delivers tax cuts for many, not all taxpayers will benefit equally. Some lower-income households see minimal change because they already owe little or no federal income tax. Others may still face caps on deductions if they live in very high-tax states.
Certain business breaks phase out for higher earners, reducing their usable benefit. And because the IRS has not yet updated withholding tables, taxpayers could experience short-term confusion about what they truly owe.
What this means for your 2025 filing
For most taxpayers, the 2025 filing season will reflect the first year of these changes. Many will notice differences in their refund size or tax bill, depending on how their withholding matched the new rules. Itemizers may find it easier to claim deductions that previously offered limited value, while families and small businesses could see larger credits or write-offs. Reviewing your withholding and planning ahead now can help you avoid surprises when it's time to file.
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Bottom line
The fact is, these new tax laws could leave millions with larger refunds next year, mostly because the IRS hasn't updated withholding tables to reflect the changes. And larger refunds equal more money back in your pocket, which can allow you to better withstand economic downturns.
But many groups of people could be impacted, with higher earners, homeowners, families, and small business owners standing to see the biggest financial impact once the new rules fully settle in.
One additional detail worth noting: Several of these tax changes are set to expire in the coming years unless Congress renews them, meaning the financial boost many households feel now may be temporary. Planning ahead with that in mind can help you avoid surprises down the road.
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