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The House Passed the One Big Beautiful Bill Act: What It Means for You

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Congress has passed the final version of the One Big Beautiful Bill Act, and it’s now headed to President Trump for signature. The law includes major tax changes, many of which are permanent, affecting individuals, families, and small businesses. Here’s what you need to know:

Key Tax Changes for Individuals

 Tax Brackets and Standard Deduction

  • Tax rates stay lower: The 2017 Trump tax cuts are made permanent, with a new system to adjust brackets for inflation.
  • Bigger standard deduction (starting in 2025):
    • $15,750 for single filers
    • $23,625 for heads of household
    • $31,500 for married couples filing jointly
    • Adjusted annually for inflation

 SALT Cap (State & Local Tax Deduction)

  • Cap increases: From $10,000 to $40,000 starting in 2025
  • Adjusts with inflation through 2029
  • Reduces for high-income earners (MAGI over $500,000), but never below $10,000

 Senior Deduction

  • People 65+ can take a $6,000 deduction (2025–2028)
  • Phases out if your income is over $75,000 ($150,000 for joint filers)

 Child Tax Credit

  • Increases to $2,200 per child (starting in 2025)
  • Keeps the $1,400 refundable portion and expands it
  • Keeps the $500 credit for non-child dependents
  • Higher income thresholds stay in place ($200,000/$400,000)

 Business Owners (QBI Deduction)

  • The 20% deduction for qualified business income is now permanent
  • Income limits are raised, especially for service businesses
  • A new $400 minimum deduction is added for those with at least $1,000 in qualifying income

 Mortgage Interest

  • Keeps the cap on mortgage interest deduction at $750,000
  • Home equity loan interest still doesn’t qualify
  • Mortgage insurance premiums are now deductible

 Estate and Gift Taxes

  • The exemption is permanently raised to $15 million for individuals, $30 million for couples (from 2026)
  • Adjusted for inflation

 Alternative Minimum Tax (AMT)

  • Permanent higher exemption amounts
  • More aggressive phaseout starts once income hits $500,000/$1 million

Itemized and Other Deductions

 Miscellaneous Deductions

  • Most remain suspended
  • But teachers’ out-of-pocket classroom expenses are still deductible

 Casualty Losses

  • You can only deduct personal losses from federally or certain state-declared disasters

 Pease Limitation Replaced

  • The rule that reduced itemized deductions for high earners is gone
  • New rule: deductions reduced by 2/37 of excess income

Temporary Deductions (2025–2028)

 Tips

  • Deduct up to $25,000 in tip income (for waitstaff, barbers, etc.)
  • Applies to both W-2 employees and contractors
  • Begins phasing out at $150,000 income

 Overtime Pay

  • Deduct up to $12,500 (or $25,000 jointly) in qualified overtime income
  • Must be properly reported by your employer
  • Also phases out above $150,000/$300,000

 Car Loan Interest

  • Up to $10,000 per year in car loan interest is deductible (2025–2028)
  • Only for U.S.-made cars, with personal use
  • Phases out at $100,000/$200,000 income

Family & Education Provisions

 Adoption Credit

  • Now partially refundable, up to $5,000

 Dependent Care

  • Employer-provided care exclusion increases to $7,500
  • Child and dependent care credit now covers 50% of expenses, up from 35%

 529 Plans

  • Now cover elementary, secondary, and credentialing expenses (not just college)

 “Trump Accounts” (Kids’ Retirement Accounts)

  • New retirement-style savings accounts for minors
  • Contributions capped at $5,000/year, adjusted for inflation
  • $1,000 tax credit for parents who open one (children born 2025–2028)

Student Loans & Education

 Loan Discharge

  • Student loan forgiveness due to death or disability stays tax-free
  • SSN now required on tax return

Charitable Contributions

 Non-Itemizers Can Deduct

  • Up to $1,000 ($2,000 for couples) in donations
  • Itemizers face a 0.5% minimum threshold for deduction

 Scholarship Donations

  • New credit of up to $5,000 for donating to scholarship-granting groups
  • Subject to national $4 billion cap

Business Provisions

  • 100% Bonus Depreciation and Sec. 179 Expensing made permanent
  • R&D expenses can now be deducted immediately (in U.S. only)
  • Paid Family Leave credit is permanent
  • Employer-provided child care credit increases to $500,000

Clean Energy Incentives Rolled Back

Many green energy credits are being phased out or repealed, including:

  • Electric vehicle credits (Sept 2025)
  • Clean fuel and energy credits (various dates through 2028)
  • 179D commercial energy efficiency (ends June 2026)

Other Notable Changes

 Reporting Thresholds

  • 1099-K threshold restored to $20,000 and 200 transactions
  • 1099-NEC/1099-MISC reporting threshold raised from $600 to $2,000

 ERC Claims and Promoters

  • New penalties for fraud related to employee retention credit (ERC) claims

 SSN Requirements

  • SSN required to claim certain education credits

Please call or email us for more information and questions.

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Dixie leads and manages our entire tax department. She assists and leads a team through our busiest times while delivering quality, complete and accurate tax services for our clients. She is proficient in preparation, planning, and education of federal and state income taxes for individuals, businesses, estates, trusts, and exempt organizations.

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Theresa Elaine Valade, CPA, is a highly accomplished Arizona-licensed Certified Public Accountant and founder of Concierge Consulting and Accounting, PLLC. Recognized by Forbes as one of the Top 10 CPAs in the state, she brings over 27 years of expertise in audits, reviews, compilations, tax strategy, business consulting, and fraud investigations, with specialized experience in nonprofits, real estate, hospitality, and financial services. A former Arthur Andersen auditor and tax partner at Moffitt & Company, Theresa has led high-profile engagements, including one of Arizona’s largest fraud investigations and IRS training audits, and frequently represents clients in mergers, acquisitions, and complex tax matters. Her firm consistently earns the highest peer review ratings, and she is a sought-after public speaker on tax reform, fraud prevention, and business operations. Committed to client success, Theresa combines technical excellence with a relationship-focused approach, guiding businesses and individuals through every stage of growth and transition.

Her areas of specialization are business consulting and advisory, audits, income tax planning and preparation, and IRS audit representation. Her industries of specialization are nonprofits, real estate, hospitality, franchises, mortgage banking and brokering, title insurance, escrow, health, and beauty.

Theresa’s also had the honor of being named 2020 CPA firm of the year for her commitment and service to her clients during the challenges imposed by the COVID-19 pandemic. Putting passion and personalization at the forefront Theresa has led her firm to excellence by not only providing measurable results for clients but making them feel well taken care of during times of great uncertainty.

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