One Big Beautiful Bill Act (OBBBA) Highlights

Donald Kluge | July 17, 2025

President Trump signed into law the One Big Beautiful Bill Act (OBBBA), a sweeping Federal tax reform package, including numerous provisions affecting individuals, estates, and businesses.

Several key provisions that were previously scheduled to expire have now been made permanent:

Tax rates established in 2017 under TCJA
Expanded standard deduction
Increased estate and gift tax exemption ($15 million lifetime per person)
Qualified Business Income (QBI) deduction

The all-new Scholarship Granting Organizations (SGO) Tax Credit will help fund scholarships for private school tuition, offering relief to eligible families, subject to income limitations. This initiative is intended to expand access to school choice.

As highlighted during the campaign, the bill also introduces temporary deductions for tips and overtime, along with a new deduction for seniors —measures designed to reduce the tax burden on Social Security benefits and provide targeted relief for working families through 2028.

The legislation phases out many energy-related tax incentives, scheduled to sunset between 2025 and 2027.

Here are some key essentials with effective dates and impact.

Individual Tax Planning Highlights

Provision	Effective	Impact
Child & Dependent Care Exclusion	2026 and beyond	Expanded to $7,500.
SALT Deduction Cap Increase	2025–2029	Cap raised to $40K, expires by 2030. Subject to AGI limits.
Interest on Auto Loans	2025- 2028	New deduction for interest on personal auto loans even for non-itemizers. Subject to AGI and other limitations.
Charitable Contributions (Itemizers and Non-Itemizers)	2026 and beyond	Itemizers: Only contributions exceeding 0.5% of AGI are deductible. Non-itemizers: Permanent above-the-line deduction up to $1,000 (single) or $2,000 (joint).
Credit for Children (CTC)	2025 and beyond	Makes permanent ACT and ACTC thresholds and amounts and increases the child tax credit to $2,200.
Credit for Contributions to Scholarship Granting Organizations	2027 and beyond	100% nonrefundable tax credit up to $1,700 per taxpayer for contributions to certified SGOs.
Trump Accounts for Babies	2025- 2028	Creates tax-free savings accounts for newborns with federal $1,000 seed contributions.

Business & Investment Tax Planning Highlights

Provision	Effective	Impact
100% Bonus Depreciation	2025 and beyond	100% bonus depreciation made permanent for qualified property placed in service after January 19, 2025.
R&D Expensing	Effective for small businesses beginning in 2024 and for large businesses beginning in 2025, with retroactive application to 2022.	Full expensing restored for domestic research. Foreign R&D still amortized over 15 years.
1099-NEC Reporting	2026 and beyond	Increased threshold from $600 to $2,000.
1099-K Reporting	2025 and beyond	Restores threshold to $20,000/200 transactions.
163(j) Interest Expense Limitation	2025 and beyond	Calculation now allows depreciation, amortization, and depletion to be added back to adjusted taxable income—expanding deductible interest for many businesses.

We appreciate the opportunity to serve as your trusted advisor and guide you through the evolving tax landscape. We encourage you to reach out to discuss how these changes impact your specific situation.

We’ll continue to keep you informed as new developments arise. Our team is here to help you stay well-positioned moving forward.