Your Quick Guide to the One Big Beautiful Bill Act

In the afternoon of July 4th, 2025, President Trump signed into law H.R.1, the One Big Beautiful Bill Act.

Included in the bill are tax law changes, changes to funding for various federal programs, and a debt ceiling increase, along with changes to other parts of the federal government.

Below are some of the key tax provisions of the bill. The Treasury Department and the IRS will be working tediously to provide additional guidance on the application of the changes, but in the meantime, here are some of the main items included for individuals, estates, and businesses:

Individual Provisions

• The current ordinary tax rates are now permanent (tax rates ranging from 10% to 37%, which were set to become 10% to 39.6%)
• Makes the standard deduction inflationary increases permanent while also permanently eliminating personal exemptions.
• The current $750,000 principal limit for the home mortgage interest deduction is now permanent.
• Temporarily increase the cap on the itemized deduction for state and local taxes (SALT) to $40,000 for 2025 (subject to phaseouts that bring the cap back to $10,000 for high-income taxpayers).
• Create a permanent $1,000 deduction for charitable contributions ($2,000 for joint filers). Pertains to those who do not itemize.
• New, temporary addition of a $25,000 income deduction for tips received by individuals in traditionally and customarily tipped industries for tax years starting in 2025 (subject to income limitations).
• Certain taxpayers will be able to deduct the premium portion of their overtime compensation up to $12,500 for single filers and $25,000 for joint filers (subject to income limitations).
• Temporarily make auto loan interest deductible for itemizers and non-itemizers for new autos with final assembly in the United States for tax years 2025 through 2028 (subject to income limitations).
  
  

Estate Provisions

• Permanently increase the estate and lifetime gift tax exemption to $15 million for single filers and $30 million for joint filers beginning in 2026 (adjusted for inflation in subsequent years).
  
  

Business Provisions

• Permanently restores 100% bonus depreciation for short-lived investments placed in service after January 19, 2025.
• The Section 199A pass-through deduction (20% deduction of qualified income) is now permanent.
• Permanent restoration of immediate expensing for domestic research and development (R&D) expenses. Rules to follow on the treatment of previously amortized expenses.
• Reinstatement, on a permanent basis, of the EBITDA-based limitation on business net interest deductions. Previously, depreciation and amortization were excluded from the limitation calculation.

Please keep an eye out for future information along with webinars on all the changes.

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