One Big Beautiful Bill Act
Your guide to everything about the latest legislation and how it impacts your taxes
Signed into Law on July 4, 2025
Notable Provisions
Individual Tax Provisions:
· Current tax brackets become permanent in 2025
· Current standard deduction becomes permanent with the following increase:
o $15,750 Single/$31,500 MFJ
· New Senior Deduction if over 65:
o $6,000 with phaseout at $75k single/$150k MFJ
o Available 2025 through 2028
· Child Credit becomes permanent in 2025 with the following increases:
o $2,200/child ($1,700 refundable)
o Phaseout at $200k single/$400k MFJ
· Dependent Care Employer Plan:
o Exclusion from income of $5,000 is increased to $7,500 beginning 2026
· Child and Dependent Care Credit:
o Enhanced income thresholds beginning 2026
· 529 Education Plans:
o Additional eligible expenditures and expands distributions for elementary and secondary schools beginning after enactment of OBBBA
· Itemized Deductions in 2026:
o If in 37% bracket, value of itemized deductions capped at 35%
o Educator and coaches: unreimbursed expenses for instructional activities included in itemized deductions (if at least 900 hours). No $$ limit.
· Mortgage Interest deduction in 2025:
o Permanently capped at $750k indebtedness
o Excludes home equity loan interest
o Mortgage insurance premiums now included (2026)
· Charitable Contributions in 2026
o New limit with a floor of .5% of total contributions
o Permanent deduction of $1k single/$2k MFJ, regardless if itemize
· Moving expenses permanently excluded in 2025 (except for active-duty members of the Armed Forces and Intelligence Community that move pursuant to government orders)
· Gambling losses in 2025:
o Losses still only allowed up to gains, but now losses limited to 90%
· Tips: no tax up to $25k if denoted on W-2 or 1099
o Phaseout $150k single/$300k MFJ
o Available 2025 through 2028
· Overtime Pay: deduction up to $12.5k single/$25k joint if denoted on W-2
o Phaseout $150k single/$300k MFJ
o Available 2025 through 2028
· Car Loan Interest: deduction up to $10k if new, for personal use, and final assembly in U.S.
o Phaseout $100k single/$200k MFJ
o Available 2025 through 2028
o VIN must be reported
· State and Local Tax Itemized Deduction (SALT) Cap of $10k is extended to $40k from 2025-2029
o Phaseout by 30% from $250k-$350k single/$500-$600k MFJ
o Increased by 1% each year
o Reverts back to $10k in 2030
o No limits on state SALT Cap workarounds
Vehicle and Energy Credits:
o Clean Vehicle Credit of $7,500 expires on September 30, 2025
o Energy Efficient Home Improvement Credit of 30% of qualified expenses up to $1,200 expires on December 31, 2025
o Residential Clean Energy Credit of 30% for solar, wind, and geothermal expires on December 31, 2025
o Many more “Green New Deal” credits terminated
Business Provisions:
o Qualified Business Income (QBI):
o Made permanent at 20% in 2025
o Adds a $400 minimum deduction if phased out (Businesses with active QBI of $1,000 or more)
o Full Expensing for Certain Business Property:
o 100% bonus depreciation for property acquired and placed in service after January 19, 2025
o Includes “Qualified Production Property” (nonresidential real property used for production activities) constructed beginning January 19, 2025 through January 1, 2029, and in-service July 5, 2025 through January 1, 2031
§ Production activities defined as manufacturing space, not admin, sales or parking
o Section 179 Election:
o Increased from $1.25 mil expense/$3.13 property limit on total expenditures to $2.5 mil expense/$4 mil property limit on total expenditures
o Beginning 2025
o Research and Development Expenditures (R&D Credit)
o Full expensing beginning after January 1, 2025
o If Small Business with revenue of $31 mil or less, expensing is retroactive to 2022
o All businesses with capitalized expenditures from 2022 to 2024 can elect to accelerate remaining deductions over 1 or 2 years
o Foreign research costs are still amortized over 15 years
o Limitation on Business Interest:
o EBITDA limitation reinstated in 2025
o Business Meals Exception for 2026:
o Permanently allowing deduction for 50% of the cost of meals provided at the convenience of employer
o Charitable Deduction for Businesses:
o Can only deduct charitable contributions in excess of 1% of adjusted taxable income (limited at 10%)
o Carryforward amount under 1% floor if contributions exceed the 10% ATI limit
o Beginning in 2026
o 1099-K Reporting for Third-Party Settlements:
o Greater than $20k on more than 200 separate transactions
o Retroactive to 2022
o 1099 Reporting for Businesses and Individuals (1099-NEC and 1099-MISC):
o Reporting threshold from $600 to $2,000
o Beginning 2026
Estate and Gift Tax:
· Exemption becomes permanent in 2026 at $15 mil single/$30 mil MFJ, indexed for inflation
Trump Investment Accounts:
· Contribute up to $5k/year starting 12 months after OBBBA enactment (July 4, 2025)
· Basically a Traditional IRA
· For children under the age of 18 with SSN
· Eligible contributions can come from parents, relatives, taxable entities, tax-exempt organizations, and personal foundations. Contributions from exempt sources do not count towards the annual limit.
· Investments in diversified US equity index funds
· Distributions:
o None until 18 years old – except in cases of death or disability
o Allowed distributions from 18-25 are taxed as capital gains
Trump Investment Accounts for Newborns:
· US citizens born from 1/1/25 and 12/31/28
· $1k contribution by US Treasury
· Account to be opened by parents
· Penalties for fraud and negligence