What the One Big Beautiful Bill Act Means for You

The newly passed One Big Beautiful Bill Act (OBBBA) brings lasting changes to federal tax laws by making many temporary provisions permanent and introducing several new benefits. Whether you’re filing as an individual or managing a business, here’s what you should know:

For individuals

Tax rates remain unchanged.

The higher tax brackets that were scheduled to return in 2026 will no longer take effect, meaning current rates will stay in place for the foreseeable future.

Standard deduction increases.

Starting in 2025, the standard deduction will be $31,500 for joint filers, $23,625 for heads of household, and $15,750 for single filers.

Child Tax Credit increases.

The credit rises to $2,200 per qualifying child in 2025, with no changes to the current income phaseouts ($200,000 single/$400,000 joint).

Elimination of certain deductions is now permanent.

The law confirms the removal of personal exemptions and most miscellaneous itemized deductions, such as unreimbursed employee expenses.

Estate and gift tax exemptions increase.

The exemption climbs to $15 million beginning in 2026, with annual inflation adjustments thereafter.

New temporary provisions (2025–2028):

• Tips up to $25,000 and overtime pay in excess of regular rate up to $12,500 (single) or $25,000 (joint) can now be deducted from income.
• A new $6,000 deduction is available for seniors, phasing out above AGI of $75,000 (single) and $150,000 (joint).
• “Trump Accounts” will be pre-funded with $1,000 for children born between 2025 and 2028.

Charitable deductions expand.

Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 ($2,000 for joint filers) in charitable contributions.

Energy tax credits begin to sunset.

Credits for electric vehicles (EV) purchases and many residential energy upgrades will expire after 2025.

SALT deduction cap increases.

The state and local tax deduction limit rises to $40,000 in 2025 with a 1% annual increase through 2029. It reverts to $10,000 in 2030. The deduction is subject to phaseout above $500,000 MAGI.

The 20% QBI deduction is now permanent.

Even those with modest qualified business income may see at least a $400 deduction.

For businesses

Reporting requirements ease.

Form 1099-K is required if there are more than 200 transactions or $20,000. The 1099-NEC threshold rises from $600 to $2,000 in 2026, with annual COLA adjustments.

Full expensing remains.

Bonus depreciation and expanded Section 179 limits continue, along with retroactive full expensing of R&D costs.

C corporation tax rate stays the same.

No increase or reduction was included in the bill for corporations.

Tax Reform Resource Center

OBBBA brings comprehensive tax changes for both individuals and businesses that require proactive tax planning. Visit our OBBBA Resource Center to stay informed about significant tax law changes and business matters that impact you. Don’t miss articles, videos, webinar recordings, and more.