What’s in the House’s “One Big Beautiful Bill”? Key Tax Changes You Should Know

On May 22, 2025, the U.S. House of Representatives passed the One Big Beautiful Bill Act (H.R. 1), a sweeping $3.8 trillion legislative package that includes a wide array of tax provisions.

While the bill still likely faces revisions in the Senate, here’s a snapshot of the most important tax provisions in the current version—and how they might affect individuals, families, and businesses.

Top Individual Tax Changes

  • Permanent extension of lower tax rates and brackets: The bill would make permanent the individual income tax rates and brackets established by the Tax Cuts and Jobs Act (TCJA), including lower individual tax brackets and the increased standard deduction.   

  • Standard deduction: The nearly doubled standard deduction would be made permanent, with an additional inflation adjustment and a temporary increase for 2025–2028 ($1,000 for single filers, $2,000 for joint filers). 

  • Child Tax Credit: The credit would increase from $2,000 to $2,500 per child and include a temporary enhancement for 2025–2028. 

  • Qualified business income deduction (Sec. 199A): The 20% deduction for qualified business income from pass-through entities is made permanent and increased to 23% for tax years after 2025.  

  • Estate and gift tax exemption: The increased exemption is made permanent and raised to $15 million per individual ($30 million for married couples) in 2026, indexed for inflation. 

  • SALT deduction cap: The state and local tax (SALT) deduction cap is increased to $40,000 per household with a $500,000 income cap.   

  • Charitable deduction for non-itemizers: A temporary above-the-line deduction for charitable contributions is reinstated for 2025–2028 ($150 for single filers, $300 for joint filers). 

  • No tax on tips and overtime: For 2025–2028, above-the-line deductions are created for qualified tips (in certain occupations) and for overtime premium pay, subject to income and occupation limitations. 

  • Enhanced deduction for seniors: For 2025–2028, a $4,000 deduction is available for seniors (age 65+) with income below $75,000 ($150,000 for joint filers). 

  • Car loan interest deduction: For 2025–2028, up to $10,000 of interest on loans for U.S.-assembled passenger vehicles may be deducted, subject to income phaseouts. 

  • Moving expense deduction: The bill permanently terminates the deduction except for Armed Forces.  

  • Other deductions and credits: The bill makes permanent or enhances several other deductions and credits, including the adoption credit, employer-provided childcare credit, paid family and medical leave credit, and education-related benefits

Key Business Tax Provisions

  • Bonus depreciation: 100% expensing (bonus depreciation) for qualified property is restored for property placed in service from Jan. 19, 2025, through Dec. 31, 2029. 

  • Sec. 179 expensing: The maximum amount a business may expense is increased to $2.5 million, with the phaseout threshold raised to $4 million, both indexed for inflation after 2025. 

  • Research and experimental expenditures: Allows full expensing of domestic R&D from Jan 1, 2025 through 2029; amortization resumes in 2030. 

  • Business interest deduction: For 2025–2029, the limitation is calculated using earnings before interest, taxes, depreciation and amortization (EBITDA), rather than EBIT. 

  • Low-Income Housing Tax Credit: The 9% credit allocation is increased for 2026–2029, the bond-financing threshold for the 4% credit is lowered, and Indian and rural areas are designated as “difficult development areas.” 

  • Opportunity zones: A new round of opportunity zones is created for 2027–2033, with revised eligibility and incentives, including special rules for rural areas. 

  • Clean energy and IRS credits: The bill would terminate or phase out several clean energy credits from the Inflation Reduction Act (IRA). 

What’s Next?

The bill now moves to the Senate, where significant changes are expected. Lawmakers have already signaled that the House version is just the beginning. As negotiations unfold, we’ll be monitoring developments closely to share with our clients.

How can you prepare?

It’s never too early to start planning. These proposed changes could have a major impact on your tax situation—both personally and professionally. We recommend reviewing your current tax strategy now and considering adjustments based on what’s in the bill.

If you’d like help analyzing your position or planning for potential outcomes, our team is here to assist.