One Big Beautiful Bill: A Summary

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law. The bill faced a narrow path through Congress, with the House passing it by a slim margin along party lines, earlier in May of this year. In the Senate, three Republicans joined Democrats in opposition, creating a 50-50 deadlock. Vice President JD Vance cast the tie-breaking vote, sending the bill to the President’s desk.

OBBBA’s primary goal was to permanently extend provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire at the end of 2025. The bill also includes hundreds of additional changes to the U.S. tax code and economic policy. The outline below highlights items most relevant to our clients.

• Federal lifetime gift tax exemption increases to $15 million per individual (indexed for inflation beginning in 2027).
• Standard deduction increases to $15,750 for single filers and $31,500 for joint filers through 2028.
• Bonus deduction of $6,000 for individuals age 65 and older through 2028 (phases out above $75,000 for single and $150,000 for joint filers).
• State and Local Tax (SALT) exemption cap increases from $10,000 to $40,000 through 2028 (phases out above $500,000 taxable income at a 30% rate with a floor of $10,000).
• No tax on tips up to $25,000 and no tax on overtime pay up to $12,500 (deduction available if income is below $150,000 for single or $300,000 for joint filers).
• Mortgage interest deduction permanently capped at $750,000 (no deduction for home equity loans unless used for building, purchasing, or remodeling a home).
• Child Tax Credit increased to $2,200 per child (10% increase from TCJA).
• Charitable deduction of $1,000 for single and $2,000 for joint filers without itemizing.

• Initial $1,000 funding from the U.S. Treasury for children born between 2025 and 2028.
• Parents/guardians can contribute up to $5,000 per year until the child turns 18.
• Funds can be used for college, starting a business, or first-time home purchase without penalty.

Businesses will have greater flexibility in categorizing expenses, including:

• 100% bonus depreciation of domestic capital expenditures (e.g., equipment, technology).
• Expensing of all research and development activities (may reduce effective corporate tax rate from 21% to 14%).
• 20% Qualified Business Income (QBI) deduction for pass-through businesses and sole proprietors made permanent.

The bill offsets spending through reductions in federal programs and tax credit modifications:

• Reductions in funding for the Supplemental Nutrition Assistance Program (SNAP). In addition, responsibility has been shifted to states, and a stricter work requirement has been imposed
• Changes to Medicaid eligibility and ACA marketplace coverage, such as work requirements for able-bodied adults aged 19-64. Additionally, penalties will be imposed on states covering undocumented immigrants.
• Repeal or modification of several Inflation Reduction Act tax credits, including those for electric vehicles.
• Wind and solar projects only qualify for tax credits if placed in service before the end of 2027.

As always, please consult with our tax advisor. If you have questions or would like to initiate or revise your wealth plan, our expert planning team is ready to help. We will continue to monitor the impact this bill has on your investments.