As 2025 unfolds, taxpayers and business owners are watching Congress closely. The One Big Beautiful Bill Act — a sweeping new tax bill — could bring some of the biggest tax changes since the 2017 Tax Cuts and Jobs Act (TCJA). If you’re wondering how this proposed tax overhaul could affect your income, deductions, or business taxes, here’s what you need to know.

One of the main goals of the One Big Beautiful Bill Act is to prevent popular tax cuts from expiring at the end of 2025. Both the House and Senate versions aim to make the lower individual income tax rates, larger standard deduction, and expanded child tax credit permanent.

Homeowners and taxpayers in high-tax states are paying close attention to the SALT deduction cap. The House version would raise the SALT cap from $10,000 to $40,000 for 2025, while the Senate version keeps it at $10,000. This difference will be a key point of negotiation as lawmakers finalize the bill.

The estate tax exemption would also increase permanently to $15 million under both versions, helping more families protect wealth across generations.

In line with campaign promises, the bill introduces tax deductions that benefit tip earners and hourly employees. Both versions allow a deduction for tip income and overtime pay, though the Senate version imposes caps and phaseouts for higher-income taxpayers.

A new deduction for auto loan interest is also on the table. Taxpayers could deduct up to $10,000 of interest on new auto loans for cars purchased after 2024, through 2028 — even if they don’t itemize deductions.

Another highlight is the introduction of “Trump Accounts.” Every newborn child would receive a $1,000 tax-advantaged savings account, similar to ABLE accounts, to help families start saving early.

Business owners will find significant incentives in the proposed tax law. Both the House and Senate versions extend 100% bonus depreciation for new equipment and property. The House would keep this benefit through 2029, while the Senate would make it permanent.

Small businesses would continue to benefit from the qualified business income (QBI) deduction under Section 199A. The House version even increases the deduction from 20% to 23% for eligible business income.

The bill also restores the immediate deduction for domestic research and development costs, expands Opportunity Zones, and raises Section 179 expensing limits — all aimed at boosting investment and economic growth.

To help pay for these new tax cuts, both versions of the One Big Beautiful Bill Act would eliminate or phase out several clean energy tax credits created under the Inflation Reduction Act. This includes credits for electric vehicles, energy-efficient homes, and alternative fuel refueling.

The Senate version would phase out some credits faster than the House version — in some cases, within 90 days of the bill becoming law.

Lawmakers hope to reconcile the House and Senate versions and pass a final tax bill by early July, partly due to the need to raise the debt ceiling. However, disagreements over the SALT cap and green energy provisions may cause delays.

Stay tuned — we’ll keep you updated on the final version of the One Big Beautiful Bill Act and what these 2025 tax changes mean for you and your business.

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