Good News: Your Tax Bill Might Be Lower This Year!

The “One Big Beautiful Bill” just reshaped your 2025 tax return. Brendan breaks down how the new deductions and refund changes could save you thousands.

Find out:

• Why 2025 could be the year your tax refund finally goes up

• The hidden tax break most homeowners don’t realize they just got

• How retirees could see thousands more in deductions this year

• The surprising change that benefits high-tax state residents the most

Hey, thanks for joining me on another Coffee with Waymark. 

Today I'm gonna give you some good news. Your 2025 tax bill will probably be less than the bill you paid in 2024.

Another way of putting this is if you got a refund from the IRS, your refund may be higher. In fact, JP Morgan estimates that the average taxpayer will see refunds about $800 higher than they did in 2024, and a big chunk of that is the result of the One Big Beautiful Bill Act, which is truly the name of the legislation that passed July 4th, 2025. And I'll show you how that all comes to pass. 

But first I think what we need to do is actually do a Tax 101 on how you actually calculate your taxable income. So let's jump into that:

I have this nice little infographic to kind of walk us through what that actually looks like. So when you're calculating your taxes, you first start with income, no big surprise. So your wages, your self-employment income, your investment income, and then the income that you get from Social security.

Then you subtract any of these "above-the-line deductions", the biggest one being your 401k, IRA, and health savings account contributions. You can also take up to $3,000 of capital losses in excess of capital gains. If you're a teacher, you can take some educator expenses, so on and so forth.

That will give you the most important number on your tax return, which is your adjusted gross income.

And why do I say it's the most important? Because it impacts some deductions that you may be able to take or not be able to take, which we'll talk about in a second – some taxes that you may be subject to or not subject to, and also contribution limits. You may or may not be able to make contributions to traditional and Roth IRAs based on what your adjusted gross income is. 

So once you get to the adjusted gross income, then there's a fork in the road, and that's where the deductions come into place, and that's where this One Big Beautiful Bill Act actually starts impacting you.

If you take the standard deduction, then your standard deduction is $15,750 if you're a single taxpayer, or $31,500 if you're married, filing jointly. Everyone, every taxpayer, gets those standard deductions.

Where 2025 is different than 2024 is for folks that itemize their deductions. 

There are now a couple of really big deductions that could be available to you based on the One Big Beautiful Bill Act. The biggest one is this SALT deduction. If you are in a high-tax state like Massachusetts, which has both high property taxes and state income tax — in our specific case, our state income tax is 5% — let’s use an example:

Let's say that you are a $200,000 per year income earner, so your AGI is $200,000. At 5%, that is a $10,000 state and local tax that you pay. And let's say that you have a nice home and you're paying $10,000 in property tax. In 2024 you were capped at $10,000, so you'd only be able to take $10,000 of that $20,000 total. Now the cap has been increased to $40,000 for anyone who has an AGI less than $500,000.

So in this same case, the taxpayer who in 2024 could only deduct $10,000 now can take the full $20,000, and at a 25% tax bracket, that extra $10,000 is worth $2,500 of savings. So right there you've exceeded that $800 estimate that JP Morgan gave to us.

The other is when it comes to seniors — anyone over the age of 65. If they are making less than $150,000 AGI, they also get an additional $6,000 or $12,000 of deduction regardless of whether you itemize your deductions or take the standard deduction. So that's huge. Again, 25% tax bracket, you're married filing jointly, $12,000 of extra deduction — that's another $2,500 to $3,000 of savings just because of the One Big Beautiful Bill.

So that's all hopefully good news for you.

I am not gonna talk much about the long-term implications of this and the fact that the deficit is upwards of $2 trillion as a result of some of these tax breaks. But at least from just a tax perspective, that will be a positive thing. If individual taxpayers get $800 extra, in all likelihood they'll redeploy that $800 back into the economy, which hopefully — and this is one of the reasons why it was put in here — will stimulate the economy and things will continue to do well for us.

So thanks for listening to what I had to say about this, and I hope, as always, you be well and do good.

Brendan is the Managing Director for Waymark Wealth Management. He has extensive experience in comprehensive wealth management. His focus includes retirement planning, behavioral finance, investment portfolio construction, education funding, insurance & risk management, taxes, charitable giving, and estate planning. Brendan has an ability to take clients' complex visions and distill them down to simple action plans, helping them move from where they are today to where they want to be tomorrow.

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