The One Big Beautiful Bill

Signed into law on July 4, 2025, the One Big Beautiful Bill is the most substantial federal tax overhaul since the 2017 Tax Cuts and Jobs Act. At over 870 pages, this sweeping legislation reshapes how individuals, families, and businesses approach tax planning starting with the 2025 tax year (returns filed in 2026).

If you have questions about how these changes may affect you or your business, HM&M is here to help. You can reach out to our team directly through our contact page.

Here are a Few Key Points that might interest you:

1. For Individuals

• Tax Rates Locked In: The current seven tax brackets (10% to 37%) are made permanent.
• Higher Standard Deduction: Increased slightly above TCJA levels, with a base of $15,750 for singles, $31,500 for married filing jointly, and $23,625 for heads of household, each of which will adjust with inflation.
• New temporary deductions: Between 2025 and 2028, wage earners can deduct up to $25,000 in tips, $12,500 in overtime, with phase out when taxpayer’s MAGI exceeds $150,000 or $300,000 for a joint return and $10,000 in U.S. auto loan interest with a phase out of $100,000 and $200,000 MAGI.
• SALT Relief: The state and local tax deduction cap rises from $10,000 to $40,000 for 2025 (cap phases down to $10,000 for income exceeding $500,000) and would increase by 1% each year from 2026 – 2029. In 2030, it reverts to $10,000.
• Child Tax Credit: Permanently increased to $2,200 in 2025, indexed for inflation thereafter.
• New Deduction for Seniors: For 2025 – 2028, individuals who have attained age 65 will get a deduction of $6,000 (phase-out thresholds apply).
• Charitable Contributions: For non-itemizing taxpayers, it creates a permanent “above-the-line” deduction beginning in 2026 – up to $1,000 for single & $2,000 for joint filers for certain charitable contributions. For those itemizing, beginning in 2026, a new limit on deductions will apply; It also makes permanent the 60% contribution limit for cash gifts to qualified charities.
• Tax-Preferred Savings Accounts: A new custodial savings vehicle for children with tax-free growth and withdrawals.

2. For Business Owners

• Bonus Depreciation: 100% bonus depreciation is back and permanent, retroactive for property placed in service after January 19, 2025.
• Qualified Business Income (QBI): The 20% QBI deduction is here to stay, permanently, eliminating the 2026 sunset.
• Research and Development (R&D): Full expensing of domestic R&D expenses for tax years beginning after December 31, 2024 is permanent with transition rules. Certain taxpayers could amend returns to retroactively claim full expensing for tax years 2022-2024, while others would have the option to claim unused amortization deductions from 2022 – 2024 in 2025 or ratably over 2025-2026.
• Business Interest Deduction (§163(j)): Permanently restores EBITDA (Earnings before interest, tax, depreciation and amortization) for calculation for tax years beginning after December 31, 2024. There’s slight modification for computation for tax years after December 31, 2025.
• Opportunity Zones: It permanently renewed and modified the Opportunity Zone tax incentive program that was set to expire at the end of 2026.

3. Estate Taxes

• The exemption boost has been made permanent. The exemption being $13,990,000 per person in 2025, $15,000,000 in 2026, and adjusted for inflation in future years.

What Comes Next?

If you have any questions or want to start planning now, contact us here. Our team is ready to help you navigate the new landscape.

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