What the “One Big Beautiful Bill” Means for Your 2025 Taxes
New Tax Changes for Individuals in Pittsburgh and Western PA
By Mark Reed – Financial First-Responder & Bookkeeper in Pittsburgh
As tax advisors serving individuals across Pittsburgh and Western Pennsylvania, we’re keeping a close eye on the sweeping new legislation known as the One Big Beautiful Bill (OBB). While the name may sound bold, the real question is: What does it mean for your wallet?
This post breaks down the individual tax provisions that may impact you in 2025 and beyond—especially if you're a parent, retiree, or managing student loans. We'll also explain the much-talked-about “Trump Stock/Bonds for Babies” proposal. And don’t worry—we’re keeping things non-political, local, and easy to understand.
Key Takeaways for Individual Taxpayers
1. Tax Rates Made Permanent (10–37%)
The seven-bracket tax system introduced in 2018 (10% to 37%) is now permanently locked in. This means most individuals in Western PA will not see an automatic increase in their tax bill starting in 2026 as previously expected.
This matters especially if you were anticipating a return to the old top rate of 39.6%.
2. Standard Deduction: Locked In and Staying Generous
The enhanced standard deduction—a game-changer for many since 2018—is also here to stay:
$31,500 of income per couple is tax-free right off the top.
As a result, fewer taxpayers in Pittsburgh will need to itemize deductions, which means simpler filing and potentially lower audit risk.
3. Child Tax Credit Increased
Parents, rejoice: the Child Tax Credit is now $2,200 per child, and it’s indexed for inflation. This helps offset rising costs of childcare and school expenses—something that hits home for many families across Western PA.
4. Extra Deduction for Seniors
If you’re over age 65 and living on Social Security, pensions, or IRA withdrawals, you’ll now receive:
An additional $6,000 deduction per person (up to $12,000 per couple)
Combined with the standard deduction, some retirees could have up to $45,000 of tax-free income
This is a major win for fixed-income seniors.
5. 529 Plans & Education Expenses Expanded
Education tax planning just got more flexible:
You can now use up to $20,000 from 529 plans for K–12 private school tuition
529 funds may also cover trade schools, certification programs, and even certain professional licenses (CFP, cosmetology, etc.)
Employer-provided education assistance (up to $5,250/year) continues to be non-taxable
6. Student Loan Forgiveness Is Tax-Free
Forgiven student loans due to death or disability are no longer treated as taxable income, a permanent change under the bill.
7. ABLE Accounts Improved
Families supporting a person with disabilities can now contribute more to ABLE accounts without affecting that individual’s eligibility for government assistance.
8. “Trump Accounts” – What’s That?
Perhaps the most talked-about (and polarizing) part of the OBB is the creation of a long-term investment account for newborns—often dubbed “Trump Accounts.”
Here’s what we know so far:
Each child born after January 1, 2026 may be eligible for a federally seeded investment account
The account would include government-issued savings bonds or designated equity investments
Funds would grow tax-deferred and become accessible in adulthood for education, home purchase, or retirement
Note: This program is still in development, and many logistical and legal details will depend on how the IRS and Treasury Department implement it.
A Word of Caution: Implementation Still Pending
While the One Big Beautiful Bill has passed, many of these provisions still require interpretation and guidance from the IRS. This includes:
Final income phaseouts
Eligibility for education credits
Rules for coordinating with existing state programs (like Pennsylvania’s 529 plan)
Always consult a tax advisor (like us!) before making major changes based on proposed tax law.
Why This Matters to Western PA Residents
These changes are especially impactful in regions like Pittsburgh and its suburbs where:
A large portion of households rely on W-2 income and retirement distributions
Cost-of-living is moderate, so standard deductions and credits often make up a significant tax benefit
Many families are navigating both childcare costs and aging parents' retirement needs
Final Thoughts
The One Big Beautiful Bill is reshaping the landscape for individual taxpayers. While it's not without complexity, many of the changes could reduce your tax burden if planned for properly.
If you're in Pittsburgh or Western Pennsylvania and unsure how these changes affect you, we’re here to help.
Disclaimer: This post is for informational purposes only and does not constitute tax or legal advice. Many provisions in the One Big Beautiful Bill are still awaiting IRS implementation and may be subject to change.