Jan 5, 2026
Tax Policy Overview in the United States in 2025
In 2025, the United States introduced significant tax changes aimed at easing the tax burden on individuals and families. In July, Congress passed a law known as the One Big Beautiful Bill, which increased the standard deduction beyond inflation adjustments, adding an extra 5%. For example, the deductible amount for married couples increased by approximately $1,500.
New Deductions and Tax Benefits
New deductions were also introduced, including a specific deduction for taxpayers aged 65 and older, up to $6,000 per individual; a deduction for interest on loans used to purchase new vehicles, up to $10,000; and additional benefits for tipped workers and overtime compensation, among others.
Likewise, the cap on the deduction for state and local taxes (SALT) was raised from $10,000 to $40,000 for tax year 2025, applicable to 2026 tax filings, allowing more taxpayers to fully deduct their local taxes.
Changes to Tax Credits
Regarding tax credits, the child tax credit increased to $2,200 per child for 2025, with a maximum refundable amount of $1,400.
Expiration of Health Insurance Subsidies
However, not all developments were positive. By the end of 2025, federal subsidies that had helped millions of people obtain health insurance under Obamacare during the pandemic expired. As a result, many households are expected to face higher insurance premiums in 2026 due to the loss of this assistance.
Outlook for 2026
Looking ahead to 2026, these provisions are expected to remain stable during the tax filing season in April 2026, corresponding to 2025 income. It remains to be seen whether the new political landscape will drive further changes, such as decisions regarding the expiration of several 2017 tax cuts, in order to avoid tax increases in the coming years.