The per-person exemption equivalent for estate and gift taxes has been increased to $15 million, and will continue to be indexed. That is an increase of $100,000 or 7.14% from the previous $13.99 million.
For a hypothetical married couple with one child, based on $100,000 of income, we calculate that the combined effect of the increase in the standard deduction and the increased child credit will be a savings of $740.
For a hypothetical married couple over age 65, based on $100,000 of income, but disregarding the untaxed part of social security benefits, we calculate that the combined effect of the increase in the standard deduction and the new "senior deduction" will be a savings of $2,000. That new deduction is phased out over $150,000 of income, but very slowly. It does not disappear until the couple's annual income is over $1.15 million.
The senior deduction is $6,000 per person. The combined effect of the slightly higher standard deduction of $31,750 and the new $12,000 senior deduction is that the hypothetical couple will pay no tax on the first $43,500 of their income.
Note that, contrary to many published reports and contrary to the claims of the President, the OBBB made precisely zero changes to the rules governing taxation of social security benefits. Of course, since social security is a big part of the income of any recipient, the new senior deduction will incidentally affect that income, too, but there are no changes to taxation of social security benefits otherwise.
There is a new tax deduction for interest paid on a loan for a new American car.
There is a new IRA-like savings option for children, beginning in July 2026, with the unfortunate name "Trump Accounts." For children born in 2025 or later (citizens only), the Federal government will contribute up to $1,000 as a match.
Other resources:
Barnes Dennig on the new Car Loan Interest Deduction
Kitces - Breaking Down the OBBBA
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