Trump’s “big and beautiful bill” extends tax cuts for middle-class Americans

Republican lawmakers managed to overcome the narrow majority of the House and Senate last week to pass one big beautiful bill law. This is a package of tax and spending reforms that was prioritized by the Trump administration at the start of the second term of the president.

The bill addressed a wide range of tax and spending policies, but its main focus was on expanding the 2017 Tax Cuts and Employment Act, which expires at the end of 2017.

Among them there are several provisions that have a major impact on Middle class taxpayers.

One big beautiful bill act (OBBBA) creates a low tax range with revised revenue thresholds established by TCJA permanents. This expires at the end of the year and is set to return to the old, higher rates and thresholds.

What does the “big, beautiful bill” for American workers include?

The lowest bracket holds a tax rate of 10%, while the second bracket is 12% rather than rising to 15%, the third bracket is 22% instead of 25%, the fourth 24%, 28%, and the fifth bracket is 32% rather than 35%, and the TCJA expired.

OBBBA will provide standard deductions. This has almost doubled under the TCJA and is due for this year. The bill also increases the $750 for individuals, $1,500 for married couples and $1,125 for heads of households, which are effective for the 2025 tax year. Approximately 90% of federal taxpayers use it Standard deduction Rather than itemizing deductions.

In last year’s presidential election, Trump pledged to eliminate taxes on fallen income and overtime as a way to provide additional relief to working-class Americans.

Although the bill cannot completely eliminate federal income taxes. Advanced income And in overtime, we will create new deductions that will provide relief to ensure that such workers expire until 2028. Tip workers such as restaurant servers, barbers and drivers can subtract qualified tips up to $25,000 based on standards established by the Department of Finance.

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The bill also creates revenue deductions above the line for overtime premium payments of up to $12,500 for overtime workers.

Another policy that can trace its origins to Trump’s 2024 campaign pledge is the deduction of interest Automatic loan.

OBBBA has created a deduction of up to $10,000 eligible Passenger car Loans for taxable years are subject to deduction stages for taxpayers over $100,000 (for joint filers, the threshold is $200,000).

Eligible vehicles include automobiles, minivans, SUVs, pickup trucks and motorcycles. These will be regulated under a clean air of automobiles and will have final meetings in the United States.

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Retired workers will also benefit from tax cuts, but the bill does not completely meet Trump’s “no tax on social security.”

In addition to the standard deduction available to all taxpayers, OBBBA offers a $6,000 bonus deduction to taxpayers age 65 and over. This adds to the existing additional standard deduction for single filers and the existing additional standard deduction of $1,600 per eligible spouse for co-filers age 65 and older.

The $6,000 bonus deduction is temporary and will remain valid until 2028. High-income retireesearning individuals receive a full deduction that allows them to use up to $75,000 or $150,000 for joint filers. It’s completely step-by-step, as individuals and couples earn $250,000 in and out of $175,000.

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This provision was devised as an alternative to a proposal to eliminate taxes social security Instead, instead offsetting some of what they owe based on their income level, they bring benefits.