The ‘One, Big Beautiful’ Summary: Key Tax Provisions You Need to Know

By Emma Smith

On July 4th, President Trump signed into law the One Big Beautiful Bill Act (the “Act”)—a nearly 1,000-page legislative package that enacts sweeping policy changes across nearly every major sector of the American economy and represents one of the most significant pieces of federal tax legislation since the Tax Cuts and Jobs Act of 2017 (the “TCJA”).

The Act extends, modifies, or makes permanent a number of tax provisions originally enacted under the TCJA, and also introduces several new provisions to the Internal Revenue Code. Below, we summarize the key individual and business tax provisions of the Act.

Individual Tax Provisions

• Individual Income Tax Rates: The Act makes permanent the tax rates enacted in the TCJA permanent, including the top marginal tax rate of 37%.
• Standard Deduction: The Act makes the TCJA’s increased standard deduction amounts permanent. For tax years beginning after 2024, the standard deduction increases to $15,750 for single filers, $23,625 for heads of household, and $31,500 for married individuals filing jointly. The standard deduction will be adjusted for inflation after that. These changes have been made retroactive to include 2025.
• Personal Exemption: The Act permanently eliminates the deduction for personal exemptions.
• Senior Deduction: The Act adds a temporary $6,000 deduction for each individual over the age of 65 for tax years 2025 through 2028, subject to certain phaseouts.
• Estate and Gift Tax Exclusion: The Act permanently increases the federal gift, estate, and GST tax exemption amounts to $15 million effective January 1, 2026. The base $15 million exemption amount will be indexed annually for inflation beginning in 2027.  The exemption amount remains at $13,990,000 for 2025.
• Section 199A Deduction: The Act makes permanent the section 199A Qualified Business Income deduction.
• Home Mortgage Interest Deduction: The Act permanently extends the mortgage interest deduction limitation to interest on the first $750,000 of home mortgage acquisition debt.
• Auto Loan Interest Deductibility: For tax years 2025 through 2028, the Act provides a tax deduction up to $10,000 for car loan interest on vehicles assembled in the United States.
• Child Tax Credit: The Act increases the amount of the nonrefundable child tax credit to $2,200 per child beginning in 2025 and indexes the credit amount for inflation. The bill also makes permanent the $1,400 refundable child tax credit, adjusted for inflation.
• State and Local Tax (“SALT”) Deduction: The Act temporarily increases the limit on the SALT deduction from the current $10,000 cap to $40,000 through December 31, 2029. The Act also increases the SALT deduction limit annually for inflation. The SALT deduction limit is reduced for taxpayers with modified adjusted gross Income in excess of $500,000 but will never reduce below $10,000. This provision takes effect for tax years after December 31, 2024.
• No Tax on Tips: The Act provides a temporary, above-the-line deduction up to $25,000 for cash tips received by individuals who work in an industry that customarily receives tips.
• No Tax on Overtime: The Act provides a deduction up to $12,500 ($25,000 for married filing jointly) for qualified overtime compensation received during the year. The deduction phases out with modified adjusted gross income of $150,000 ($300,000 in the case of a joint return).
• Charitable Contributions: The Act creates a charitable contribution deduction for taxpayers who do not elect to itemize, allowing nonitemizers to claim a deduction of up to $1,000 for single filers or $2,000 for married taxpayers filing jointly for certain charitable contributions.
• Trump Accounts: The Act creates a new type of tax-favored account designed to benefit children under age 18 for education, small business investments, and first home purchases. The accounts will be automatically opened for every eligible child born between December 1, 2025, and December 31, 2028, and funded by a one-time contribution from the federal government in the amount of $1,000. Friends and family may contribute up to an additional $5,000 annually.
• Opportunity Zones (“OZ”): The Act will sunset the current set of OZs and create a new set of OZs beginning in January 2027. Governors will be required to select new OZs every 10 years. The Act narrows eligibility criteria for OZs, with the threshold for designating a tract as a “low-income community” falling from 80% of area or statewide median income to 70%. The Act heavily favors rural over non-rural investment, offering up to a 30% reduction in capital gains tax for projects that meet certain eligibility criteria. OZ investments will now be subject to reporting and transparency requirements, with the Department of Treasury committed to publishing annual reports on OZ investments.
• Low–Income Housing Tax Credit: The Act permanently increases the state allocation ceiling by 12% and lowers the bond-financing threshold to 25% beginning in 2026.

Business Tax Provisions

• Bonus Depreciation: The Act permanently extends 100 percent bonus depreciation for qualified property acquired and placed in service after January 19, 2025. An additional first year depreciation deduction is available for manufacturing, production and refining property.
• Section 179 Expensing: The Act increases the maximum amount a taxpayer may expense under Sec. 179 to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million.
• Research and Development Expenses: The Act allows taxpayers to immediately deduct domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2024. Research or experimental expenditures attributable to research that is conducted outside the United States will continue to be required to be capitalized and amortized over 15 years under Sec. 174. Certain small business taxpayers that meet a gross receipts test may be permitted to apply this change retroactively to tax years beginning after December 31, 2021.
• Deductibility of Business Interest: The Act restores the TCJA’s more favorable EBITDA calculation of business interest deduction limit for tax years beginning in 2025.
• Section 1202 Qualified Small Business Stock (“QSBS”): The Act modifies the existing 100% exclusion of gain on QSBS stock held at least 5 years and now includes both a 50% exclusion for stock held with at least a 3-year holding period, and a 75% exclusion for stock held with at least a 4-year holding period. The amount of gain that can be excluded is increased from $10 million to $15 million.

In addition to the individual and business tax provisions mentioned above, the Act significantly rolls back many of the core tax incentives enacted under the Inflation Reduction Act of 2022, particularly those related to clean energy and environmental initiatives. Taxpayers should pay close attention to phase outs and stricter requirements for their clean energy projects and consult a tax professional for guidance where necessary.

Looking Ahead

The Act contains significant tax changes that will have wide-ranging effects on businesses and individual taxpayers. Taxpayers should consult their tax professionals to understand how these provisions and their effective dates affect current information reporting and long-term strategies for wealth and succession planning.

In the weeks ahead, Comiter Singer will continue to analyze the Act’s key provisions and publish in-depth guidance on how these changes may impact a wide range of tax and estate planning strategies. Our goal is to help clients and advisors navigate the evolving legal landscape with clarity and confidence, ensuring that planning objectives remain aligned with the latest developments.

Please do not hesitate to contact the estate and tax planners at Comiter Singer to discuss how this legislation impacts your current estate plan and whether there are opportunities you may wish to consider at this time.