What’s in the One Big, Beautiful Bill for You
The One Big, Beautiful Bill Act (OBBBA) makes permanent tax cuts and savings for individuals and households established by the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025:
- Individual income tax rates stay low: Seven brackets remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
- Standard deduction doubled permanently and enhanced: The deduction of $15,000 for single filers and $30,000 for married filers is made permanent and increased to $15,750 for single filers and $31,500 for married filers for 2025.
- Child Tax Credit (CTC) enhanced: The credit of $2,000 per child is increased to $2,200 per child and permanently adjusted for inflation.
- Estate exemption raised: Increased to $15 million.
OBBA adds new popular tax savings for working Americans, kids, and seniors:
- NO tax on tips: Tip income up to $25,000 can now be deducted, phasing out for single filers earning $150,000 or married filers earning $300,000 through 2028.
- NO tax on overtime: Overtime income up to $12,500 can now be deducted, phasing out for single filers earning $150,000 or married filers earning $300,000 through 2028.
- NO tax on car loan interest: Payments up to $10,000 can now be deducted until the end of 2028, phasing out for single filers earning $100,000 or married filers earning $200,000 through 2028.
- Savings for seniors: Seniors over 65 who are U.S. citizens can now enjoy $6,000 per individual, phasing out for single filers with modified adjusted gross income (MAGI) over $75,000 or $150,000 for married filers.
- Trump accounts: Babies born between Jan. 1, 2025, and Jan. 1, 2029 will receive $1,000 savings accounts. The money will be deposited into a private custodial investment account and grow tax-free until the child reaches adulthood. Parents, churches, charities, and employers can also contribute up to a combined $5,000 annually. At age 18, the young adult can access half the funds for college or skills training, to start a business, or toward a home down payment.
OBBA makes permanent small business and corporate savings that will make the economy grow:
- Pass-through deduction for small businesses: 20% deduction made permanent.
- Immediate research and development (R&D) expensing revived: Reinstated after expiring and made permanent.
- 100% bonus depreciation revived: Full expensing of capital investments made permanent. This will encourage businesses to invest in equipment that will allow their companies to grow.
- Opportunity zone tax incentives revived. The program to spur investment in underinvested areas was revived. Importantly, OBBBA added new reporting requirements and penalties beginning in 2027 for non-compliance to better assess the effectiveness of the program.
For more on specific provisions:
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