Middle-class taxpayers have something to gain from the newly-passed One Big Beautiful Bill (BBB). The BBB not only extends many of the expiring provisions from the 2017 Tax Cuts and Jobs Act, but it also includes several Trump campaign promises.
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Higher refunds, lower tax rates and expanded deductions and credits are all on the table. Here are several ways tax professionals say the middle class can take advantage of the Big Beautiful Bill.
Bigger Tax Refund
“There is the possibility of receiving greater refunds with enhanced tax credits for dependents and childcare,” Sherman Standberry, certified public accountant (CPA) and managing partner at My CPA Coach, wrote in an email. “If you have children or dependents, check eligibility for the enhanced Child Tax Credit and Dependent Care Credit.”
Under the BBB, the maximum child tax credit increased from $2,000 to $2,200 per qualifying child, and increased the child and dependent care credit from 35% to 50% of eligible care expenses. Income thresholds for middle-income families have also been adjusted.
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Additionally, a new announcement from the IRS also points to Americans receiving a higher tax refund next year thanks to tax breaks in the BBB. In the notice, the IRS explained that as part of the BBB’s phased implementation, there will be no changes to certain information returns or withholding tables.
According to Newsweek, this means Americans will continue to pay taxes on tips and overtime, but will receive them back as part of their refund.
Higher Standard Deduction
“The standard deduction increases by $750 ($1,500 for married couples) starting in 2025,” explained Miryam Wisnicki, principal at Clifton Larson Allen (CLA). “Most middle-class taxpayers claim the standard deduction, so the increased standard deduction will provide broad relief to the middle class.”
Because the standard deduction reduces the amount of income subject to tax, this increase means more earnings are shielded from taxation. For many middle-income households, that translates into a lower overall tax bill without the need to itemize deductions.
“Taxpayers who claim the standard deduction can deduct up to $1,000 ($2,000 for married couples) for cash contributions to charity starting in 2026,” Wisnicki added. Previously, this was only available to those who itemized.
Lower Tax Rates
“The reduction of marginal tax rates for some income brackets is another noteworthy change that could translate into higher take-home pay for many households,” according to Standberry.
Lower marginal tax rates mean that a greater portion of your income is taxed at a reduced rate, leaving you with more after-tax income.
Above-the-Line Deductions
The BBB introduces several above-the-line deductions that may benefit middle-income earners, depending on their employment circumstances, wrote Chad D. Cummings, attorney and CPA at Cummings & Cummings Law.
“These include deductions for reported tip income, overtime wages and car loan interest, provided the vehicle was assembled in the United States,” Cummings explained. “Although subject to income phaseouts, these provisions reward taxpayers who remain active in the workforce and may serve to reduce adjusted gross income for purposes of other credits and deductions.”
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This article originally appeared on GOBankingRates.com: I’m a CPA: 4 Ways the Middle Class Can Take Advantage of the Big Beautiful Bill
