The “One Big Beautiful Bill Act” (H.R.1), signed into law on July 4, 2025, includes a wide array of tax implications for individuals and businesses, largely stemming from the permanent extension and modification of provisions from the 2017 TCJA, alongside new tax relief measures and offsets. Here is an overview of some of the key tax implications that have been signed into law.

1. Individual and Family Tax Provisions:

• Permanent Lower Individual Tax Rates and Brackets: The bill permanently extends the lower individual income tax rates and brackets established by the TCJA, which were scheduled to expire after 2025. It also provides an extra inflation adjustment to the bottom six brackets, resulting in lower tax bills for many taxpayers.
• Increased Standard Deduction: The doubled standard deduction from the TCJA is permanently extended. Additionally, an extra inflation adjustment is provided.

• SALT Deduction Cap: The $10,000 cap on individual itemized deductions for state and local taxes is temporarily increased to $40,000 for tax years 2025 through 2029, with a phase-down for incomes over $500,000.

• New Deductions for Tipped and Overtime Workers: The bill introduces new provisions allowing workers to deduct income earned from tips and overtime pay, effective through 2028. The benefit for tipped workers is limited to $25,000. The benefit for overtime workers is limited to $12,500 ($25,000 MFJ). Both benefits would phase out when the taxpayer’s modified adjusted gross income exceeds $150,000 ($300,000 for MFJ) and expires in 2028.

• Additional Deduction for Seniors: Taxpayers over the age of 65 can claim an additional $6,000 deduction per individual (2025-2028); phased out at higher incomes.

• Mortgage Interest Deduction Cap: The $750,000 cap on the mortgage interest deduction for acquisition debt is made permanent.

• Mortgage Insurance Deduction: Borrowers can now permanently deduct mortgage insurance premiums (PMI, FHA MIP, VA funding fees, and USDA guarantee fees), subject to income limits.

• Child Tax Credit (CTC): The bill permanently increases the child tax credit to $2,200 per child, with $1,700 refundable with inflation adjustments.

• Health Savings Account (HSA) Expansions: The bill expands access to HSAs for patients with high-deductible health plans (HDHPs) and those with bronze and catastrophic-level plans through ACA marketplaces. It also allows HSAs to be used for direct primary care.

• “Trump Accounts” Establishment: The bill would create a new Sec. 530A, to establish a new type of tax-preferred account. These accounts would be set up for the exclusive benefit of an individual and designated at the time of establishment as such (under rules Treasury will promulgate). The accounts would be exempt from tax. Complete details are still being established. Employer contributions to Trump accounts excluded from income up to $2,500 per employee.

• Scholarship Tax Credit: A new scholarship tax credit is introduced.

• Non-Itemizer Charitable Deduction: A deduction for charitable contributions is available even for non-itemizers. The charitable deduction has been added for taxpayers who utilize the standard deduction equal to a $1,000 deduction for single taxpayers and $2,000 for married couples from 2025-2028.

• Estate and Gift Tax: The bill extends and expands cuts to the estate tax. Increases exemption to $15 million (indexed from 2026); makes higher exemption permanent.

• No Tax on car loan interest: Allows deduction for up to $10,000 of interest on new car loans (2025–2028); must be US-assembled passenger vehicles with the vehicle serving as security for the loan. Other exceptions apply.

• 1099 reporting: The threshold for required reporting has increased from $600 to $2,000.