On July 4, President Trump signed the much-anticipated “One Big Beautiful Bill Act” (OBBB) into law, following approval by both the Senate and the House of Representatives. This sweeping legislation permanently extends and reshapes many provisions of the 2017 Tax Cuts and Jobs Act (TCJA), with wide-ranging implications for individuals, businesses, nonprofits, and international taxpayers.
We’re continuing to monitor implementation and are committed to helping our clients understand the law’s implications for planning and operations.
What’s in the “One Big Beautiful Bill”?
The final version of the OBBB builds on earlier proposals from both chambers, with several notable revisions and additions. Key highlights include:
Individual Provisions
- Permanent Tax Rates: TCJA’s seven-bracket system becomes permanent, with inflation adjustments. The 10% and 12% brackets receive an extra year of indexing.
- Standard Deduction & Senior Bonus: The higher standard deduction is locked in. A $6,000 “senior bonus” deduction applies from 2025–2028, phasing out at $75,000 – $175,000 for Singles and $150,000 – $250,000 for Married Filing Jointly MAGI.
- Child Tax Credit: Increases to $2,200 per child ($1,700 refundable), indexed for inflation. One spouse must have an SSN when filing jointly.
- Child & Dependent Care Credit: Expanded to 50% of eligible expenses with tiered AGI-based phaseouts.
- Estate & Gift Tax: Exemption rises to $15 million per individual in 2026, indexed.
- Tips & Overtime Deductions: Above-the-line deductions up to $25,000 (tips) and $12,500 (overtime) for 2025–2028. Phases out at $150,000/$300,000 MAGI.
- Car Loan Interest: Deduct up to $10,000 on interest for U.S.-assembled personal vehicles (2025–2028), with MAGI-based phaseouts.
- Charitable Contributions: Non-itemizers can deduct up to $1,000 ($2,000 joint). Itemizers must exceed a 0.5% AGI floor.
- SALT Deduction Cap: Temporarily raised to $40,000 from 2025–2029, with inflation adjustments and a phase-down above $500,000 MAGI. PTET workaround remains intact.
- Qualified Business Deduction: Section 199A is made permanent at 20%, with expanded phase-in limits and a $400 minimum deduction.
- Trump Accounts: Tax-deferred IRAs for minors with a $1,000 federal contribution (2026–2028) and structured withdrawal rules.
Business & Nonprofit Provisions
- Bonus Depreciation: 100% expensing restored permanently for property placed in service after Jan. 19, 2025.
- Section 179: Expensing limit increased to $2.5M with a $4M phaseout.
- R&D Expensing: Full expensing for domestic R&D from 2025. Retroactive relief to 2022 is available for small businesses.
- Interest Deductibility: Section 163(j) returns to an EBITDA-based limit permanently.
- Childcare Credit: Credit expanded to 40% of expenses ($500K cap; $600K for small businesses)
- Qualified Small Business Stock: Gains now excluded 50% (3 years), 75% (4 years), 100% (5+ years). Asset limit raised from $50M to $75M.
- University Endowment Tax: Institutions with large endowments may face higher tax liabilities.
Clean Energy Credits
Multiple energy credits are terminated or phased out, including EV, solar, hydrogen, and energy-efficient property credits. See the full list at the IRS Clean Energy Credits Page here.
International Tax Changes
The bill replaces foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI) and tightens the base erosion and anti-abuse tax (BEAT) rules.
Economic Outlook and Legislative Path
The bill is projected to reduce federal tax revenue by $5 trillion over 10 years on a conventional basis. Supporters cite potential boosts in GDP, job creation, and capital investment. Opponents warn of rising deficits and reduced health care and social program funding.
What This Means for You
The “One Big Beautiful Bill” touches nearly every corner of the tax code, from personal deductions to business incentives to cross-border rules. Whether you’re planning for retirement, leading a growing company, or managing a nonprofit, these changes could influence how you plan, invest, and grow.
We know tax law can feel overwhelming, that’s why we’re staying ahead of the details, translating complexity into clear, actionable insights. As more guidance is released in the coming months, we’ll continue to share updates that help you make confident, informed decisions.
If you’re wondering how these changes could affect your strategy, your operations, or your next move, now’s a good time to talk. Your DHJJ advisor is here to walk you through what’s changing and what it means for you.
