top of page
Search

One Big Beautiful Bill Act - 2025 (OBBB)

  • Writer: Halverson & Company
    Halverson & Company
  • 2 days ago
  • 3 min read


May 22, 2025 — The U.S. House of Representatives passed H.R. 1, the One Big Beautiful Bill Act, a sweeping $3.8 trillion reconciliation package that proposes major changes to the U.S. tax code. The bill features a wide range of tax provisions affecting individuals, businesses, and international taxpayers.

While the Senate is expected to propose revisions, the House version provides valuable insight into the direction of future tax legislation. Below, we highlight the key provisions as currently drafted and offer preliminary guidance on how they may impact your tax strategy.


Key Individual Tax Provisions

  • Permanent Lower Tax Brackets The bill would permanently extend the individual tax brackets established by the 2017 Tax Cuts and Jobs Act (TCJA), including lower marginal rates and a higher standard deduction.

  • Enhanced Standard Deduction The nearly doubled standard deduction would be made permanent and adjusted for inflation. A temporary boost is also proposed for 2025–2028:

    • $1,000 for single filers

    • $2,000 for joint filers

  • Child Tax Credit Increase The credit would rise from $2,000 to $2,500 per child, with temporary enhancements through 2028.

  • Qualified Business Income Deduction (Sec. 199A) The 20% deduction for pass-through business income would become permanent and increase to 23% starting in 2026. There can be limitations based on the type of business such as if you are a Specified Service Trade or Business (SSTB) you may face limitations.

  • Estate & Gift Tax Exemption The exemption would be locked in at $15 million per individual (or $30 million per couple) starting in 2026, indexed for inflation.

  • SALT Deduction Cap Adjustments The cap on state and local tax (SALT) deductions would increase to $40,000 per household, with eligibility capped at $500,000 of income.

  • Charitable Deduction for Non-Itemizers Reinstates an above-the-line deduction for charitable giving (2025–2028):

    • $150 for single filers

    • $300 for joint filers

  • Tip and Overtime Tax Relief Allows above-the-line deductions for certain tips and overtime pay between 2025–2028, subject to occupation and income criteria.

  • Senior DeductionSeniors (65+) with income under $75,000 ($150,000 for couples) may claim an additional $4,000 deduction (2025–2028).

  • Car Loan Interest Deduction Up to $10,000 of interest on loans for U.S.-assembled passenger vehicles could be deductible (2025–2028), subject to phaseouts.

  • Moving Expense Deduction Permanently eliminated, except for members of the Armed Forces.

  • Other Enhancements The bill expands or makes permanent several other tax benefits, including:

    • Adoption Credit

    • Employer-Provided Childcare Credit

    • Paid Family and Medical Leave Credit

    • Education-Related Tax Benefits


Key Business Tax Provisions

  • Bonus Depreciation Reinstated 100% bonus depreciation for qualified property placed in service from Jan. 19, 2025, through Dec. 31, 2029.

  • Sec. 179 Expensing Expansion Increases the expensing cap to $2.5 million, with a phaseout starting at $4 million—both indexed for inflation post-2025.

  • R&D Full Expensing Domestic research expenses would be fully deductible from 2025–2029; amortization resumes in 2030.

  • Interest Deduction Rules Updated For 2025–2029, the limit on business interest deductions will be based on EBITDA rather than EBIT, potentially increasing allowable deductions.

  • Low-Income Housing Tax Credit Boost

    • 9% credit allocations expanded (2026–2029)

    • Easier access to 4% credits via a lower bond-financing threshold

    • Expanded support for rural and Indian areas

  • Opportunity Zones Relaunch A new round of zones for 2027–2033, with updated rules and increased incentives, particularly for rural investment.

  • Clean Energy Credit Rollbacks Several clean energy tax credits enacted under the Inflation Reduction Act (IRA) would be repealed or phased out.


What Happens Next?

The bill now advances to the Senate, where substantial revisions are anticipated. Senate Finance Committee members have indicated they will not simply endorse the House version, signaling a potentially lengthy negotiation process.


We are monitoring developments closely and will keep you informed as the legislation evolves. If you have questions or want to proactively adjust your tax strategy, please contact us today.

 
 
bottom of page