Key Takeaways
- Permanent tax relief for individuals: The OBBB makes the TCJA’s seven tax brackets and higher standard deduction permanent, benefiting most taxpayers. A senior bonus deduction and higher child tax credits offer added support for families and retirees.
- Big wins for small businesses: 100% bonus depreciation is restored, and immediate domestic R&D expensing is back, offering major savings and growth incentives.
- Temporary SALT cap increase: The SALT deduction cap jumps to $40,000 (from $10,000) through 2029. This change impacts high-income earners and multi-state tax planning.
- Estate and succession planning made easier: Higher federal estate and gift tax exemptions are now permanent, easing family business transitions, though state-level planning remains essential due to inconsistent adoption.
- Act now, plan ahead: With IRS guidance pending and key provisions sunsetting after 2028, proactive, strategic tax planning is more critical than ever, especially for businesses in multiple states or undergoing generational transitions.
The One Big Beautiful Bill (OBBB) is the talk of the town. And it’s easy to see why. Signed into law on July 4, 2025, the Bill has multiple facets. These range from making certain tax policies permanent, extending significant deductions, and cutting funding for various social programs. Basically, the OBBB represents a sweeping, multi-trillion‑dollar overhaul across taxation, healthcare, welfare, and defense.
And in this blog, we’ll unpack the most significant changes introduced by the OBBB and how they impact you and your business.
What Is the One Big Beautiful Bill?
While the name “One Big Beautiful Bill” doesn’t appear on the final version of the legislation due to Senate naming rules, it’s still what this Bill is referred to in the media and by tax professionals.
The Bill has four main goals. These are:
- To stimulate economic growth: The tax components of the bill are expected to raise long-term GDP by about 1.2% by 2026-2028.
- To simplify and codify tax structure: The Bill makes the bulk of the Tax Cuts and Jobs Act (TCJA) permanent, to reduce uncertainty around expiring provisions. There are also new provisions, to simplify taxes.
- To help middle-classes: Extensive new benefits have been introduced which are tailored toward working- and middle-class taxpayers.
- Fiscal rebalancing via cuts: While delivering tax cuts, the Bill also slashes an estimated $1 trillion in spending from Medicaid, SNAP, and student aid.
And of course, it has a connection to broader tax reform efforts. These include:
- An extension of the 2017 TCJA provisions: OBBB permanently extends key tax reforms that were supposed to expire by the end of 2025, like structurally lower tax brackets, a higher standard deduction, and elevated estate and gift exemptions.
- SALT cap reform: The Bill temporarily raises the SALT (State and Local Tax) deduction cap from $10,000 to $40,000 per year (until 2029).
- Business tax enhancements: OBBB restores 100% bonus depreciation, and enhances write-offs for equipment and R&D investments.
Now that we’ve covered the broad strokes of the Bill, let’s take a closer look at the implications.
Key Tax Changes for Individuals
When it comes to your personal income taxes, you’ll mainly feel the ramifications of the OBBB in four key areas:
- Income tax brackets and rates
- Child tax credit and dependent exemptions
- SALT cap updates
- Home energy and EV credits
The table below shows how these areas could affect you.
| Category | Key Tax Changes for Individuals |
| Income tax brackets and Standard Deduction | The OBBB makes the seven tax brackets introduced by the TCJA permanent. This means the lowest rate is at 10%, and the highest at 37%. It also extends the reduced rates beyond 2025. The standard deduction amounts have been permanently increased, and will be indexed for inflation annually. They’re now $15,750 for single filers and $31,500 for married filing jointly. This will also reduce the need for itemizing deductions. Personal exemptions remain suspended for most taxpayers, but individuals aged 65 and older may claim a temporary bonus deduction of up to $6,000, which phases out through 2028. |
| Child Tax Credit and dependent exemptions | The Child Tax Credit will increase to $2,200 per qualifying child in 2025. It will also be fully indexed for inflation in subsequent years, along with the refundable portion of the credit. |
| SALT Cap | The State and Local Tax (SALT) deduction cap will temporarily increase from $10,000 to $40,000 annually for tax years 2025 through 2029, with a 1% annual inflation adjustment. |
| Home Energy and EV Credits | The Residential Clean Energy Credit and the Home Improvement Credit are set to expire at the end of 2025. Also, the federal tax credits for new and used electric vehicles will expire on September 30, 2025, after which no federal EV credits will be available. |
In addition to the changes mentioned above, the OBBB also introduces additional alterations which could impact retirees, and those looking at succession and estate planning.
Changes to retirement planning
With the changes to the tax brackets introduced by the Bill, and the senior bonus deduction, it’s a good time for anyone retiring to consider partial Roth conversions, to reduce future Required Minimum Distributions (RMDs) and lower overall taxable income later.
Estate planning implications
Under the OBBB, the increases to estate and gift tax exemptions were made permanent. However, the state-level implications of this can vary. For instance, unlike Connecticut, states like New York won’t match the federal exemption.
Now let’s look at how the OBBB impacts businesses.
Key Business Provisions
The table below summarizes how the OBBB could impact your company.
| Provision | Details |
| Corporate tax rate adjustments | OBBB maintains the 21% corporate flat tax rate from the TCJA. FDII (now FDDEI) effective rate increased to 14%, GILTI to 40%. Foreign tax credit rules are also revised. |
| Pass-Through income deduction | The qualified business income (QBI) deduction is made permanent. A $400 minimum deduction applies for those earning at least $1,000 in QBI. |
| Bonus depreciation and expensing | OBBB restores 100% bonus depreciation for qualified assets acquired after Jan 19, 2025, reversing the planned phase-out. Also extends 100% expensing for production property placed in service before Jan 1, 2034. |
| R&D credit treatment | Immediate expensing of domestic R&D costs under Section 174A is restored, retroactive to 2022. Businesses can amend returns for prior years. Tech companies are among key beneficiaries. |
| SBA loan / Tax Credit incentives | Small businesses gain from permanent QBI deductions, restored expensing, and retroactive R&D relief. |
There are also changes which could affect your family business. The first is a gift timing advantage. This means you may still choose to make gifts before year-end to lock in growth outside the estate. Next, lower estate tax liabilities reduce the urgency for family businesses to set up complex trust structures. Many owners can now transfer ownership more smoothly using basic buy-sell agreements or gifting strategies.
What’s Still Uncertain or in Debate under the OBBB?
The many additions and changes listed in this blog aren’t the only things to consider when it comes to the OBBB. At the time of writing, there are still a few points of uncertainty. For example, several of the provisions under the Bill come with ‘sunset’ clauses, meaning that they expire after 2028, unless they’re extended by Congress. These include some temporary tax credits and deductions, the clean energy and EV-related credits, and the change to the SALT cap.
Also, there are ongoing delays to IRS guidance and implementation. For instance, the body must still publish an official list of occupations eligible for the tipped-income deduction and overtime deduction.
These changes as well as the uncertainty surrounding them, mean that your tax planning game needs to be on point. In fact, proactive tax planning is more important than ever. So to see how you can make the OBBB work for you and your business, schedule a Discovery Call with one of our tax pros, for a tailor-made tax strategy that works for you.
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This blog does not provide legal, accounting, tax, or other professional advice. We base articles on current or proposed tax rules at the time of writing and do not update older posts for tax rule changes. We expressly disclaim all liability regarding actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.