One Big Beautiful Bill Act Key Provisions
OBBBA Key Provisions for Individuals & Families
(Based on the July 11, 2025 Letter)
The OBBBA introduces several impactful changes for individual taxpayers, many of which build on or make permanent provisions from the 2017 Tax Cuts and Jobs Act (TCJA):
Tax Rate & Deduction Changes
- TCJA Tax Cuts Made Permanent: The lower individual income tax rates introduced in 2017 will no longer sunset.
- Standard Deduction Increased:
- $15,750 for single filers
- $31,500 for married couples filing jointly
- AMT (Alternative Minimum Tax) Exemptions: Permanently extended, with adjusted phaseout thresholds.
New & Expanded Deductions
- Tax-Free Tips & Overtime: Workers in eligible industries can deduct:
- Up to $25,000 in tips
- Up to $12,500 in overtime pay
(Subject to income limits and eligibility criteria)
- SALT Deduction Cap Raised: Temporarily increased to $40,000, with a 1% annual increase through 2029. Reverts to $10,000 in 2030.
- Senior “Bonus” Deduction: New deduction for taxpayers over age 65, available from 2025 through 2028.
- Charitable Deduction for Non-Itemizers: Reinstated and made permanent after 2025. Allows:
- Up to $1,000 for individuals
- Up to $2,000 for married couples filing jointly
Family & Estate Planning
- New Children’s Savings Accounts: Tax-advantaged accounts for minors with restrictions on withdrawals and investment types.
- Gift & Estate Tax Exemptions:
- 2025: $13.99M (single) / $27.98M (joint)
- 2026: Increased to $15M (single) / $30M (joint)
Other Notable Changes
- Child Tax Credit: Enhanced to benefit more families.
- Car Loan Interest: Some interest may now be deductible.
- Electric Vehicle Credits: Eligibility narrowed.
- Student Loans: Some borrower-friendly provisions rolled back.
OBBBA Key Provisions for Business Owners
(Based on the July 8, 2025 Letter)
The OBBBA introduces several tax incentives and structural changes aimed at supporting small and mid-sized businesses:
Business Expensing & Depreciation
- Section 179 Expensing:
- Deduction limit increased to $2.5 million
- Phaseout begins at $4 million in qualifying investments
- Section 168 Manufacturing Incentives:
- Full expensing of qualified production property in year one
- 100% bonus depreciation reinstated for property placed in service after Jan 19, 2025
(Applies to U.S.-based manufacturing/refining property built or bought between Jan 19, 2025 and Dec 31, 2028)
Research & Innovation
- Domestic R&D Expenses:
- Immediate expensing restored for domestic research and experimental costs
- Optional amortization available (previously required under TCJA)
Investment & Ownership Incentives
- Qualified Small Business Stock (QSBS):
- Gain exclusion increased from $10M to $15M
- Gross asset threshold raised from $50M to $75M
- Applies to shares acquired after July 4, 2025
- Both limits indexed for inflation starting in 2027
Small Business Income Deduction
- Section 199A (QBI Deduction):
- 20% deduction for qualified business income made permanent
- Applies to sole proprietors, partnerships, S corps, and some LLCs
- Minimum deduction of $400 for taxpayers with at least $1,000 in QBI
- REIT dividends and PTP income remain eligible
Personal Tax Impacts for Business Owners
- Business owners may also benefit from the individual provisions, including:
- Increased standard deduction
- Senior bonus deductions
- Expanded charitable deductions