Top Tax Provisions from the 'One Big Beautiful Bill'
1. 2017 Tax Cuts Made Permanent
Makes the 2017 Tax Cuts and Jobs Act (TCJA) tax brackets and standard deduction permanent for all taxpayers, preventing any scheduled tax increases for tax year 2026.
Higher rates, now permanently removed, versus TCJA Lower Tax Rates in operation since 2017:
Higher Standard Deduction Made Permanent - Comparison: 2024 vs. 2025 and Following
Standard Deduction by Filing Status
| Filing Status | 2024 Standard Deduction | 2025+ New Law (Permanent) | Increase |
| Single | $14,600 | $15,750 | +$1,150 |
| Head of Household | $21,900 | $23,625 | +$1,725 |
| Married Filing Jointly | $29,200 | $31,500 | +$2,300 |
| Married Filing Separately | $14,600 | $15,750 | +$1,150 |
Senior Bonus Deduction (Age 65+)
| Filer Type | 2024 Add-On Amount | 2025-2028 New Law | Increase |
| Single | +$1,950 | +$6,000 | +$4,050 |
| Married (Both 65+) | +$3,100 | +$12,000 | +$8,900 |
Note: Senior bonus deduction begins phasing out at $75,000 (single) and $150,000 (joint), and is fully phased out at approximately $175,000 and $250,000, respectively.
All 2025+ standard deductions are indexed for inflation.
2. $2,200 Child Tax Credit
Raises the child tax credit to $2,200 per child, fully refundable and inflation-adjusted. Phases out for single filers over $200,000 and joint filers over $400,000.
3. Tip Income Deduction
Allows deduction of tip-based earnings for workers with income under $150,000, capped at $25,000 per year, valid through 2028.
4. Overtime Pay Deduction
Creates a deduction for overtime earnings for individuals earning under $150,000, capped similarly to tips, valid through 2028.
5. New Car Loan Interest Deduction
Permits up to $10,000 of interest deduction on new auto loans for U.S.-assembled cars bought 2025-2028; phases out for singles over $100k or joint filers over $200k.
6. Temporary SALT Cap Increase
Raises SALT deduction to $40,000 ($20,000 MFS) for households earning <$500,000 in 2025, phasing down above $500,000. Reverting to $10,000 in 2030.
7. Special Bonus Deduction
Allows a special $6,000 deduction for taxpayers aged 65+, phasing out for MAGI over $75k (single) and $150k (joint), valid through 2028. This special deduction is "in lieu" of the "No Tax on Social Security" campaign promise.
8. "MAGA" Newborn Savings Accounts
Allows one-time $1,000 tax-exempt contribution for each newborn into a designated savings account; annual contribution limit $5,000. No income cap specified.
9. Above-the-Line Charitable Deduction
Introduces $2,000 ($1,000 single) deduction for non-itemizers; no income limit specified, encouraging broader charitable giving. Effective for tax year 2026 and following.
10. 100% Bonus Business Depreciation Made Permanent
Allows immediate expensing of 100% qualifying property costs, permanently restoring full write-off for businesses without income limits.
11. Full R&D Expensing
Permits immediate expensing for domestic R&D costs, reversing prior amortization rules -- available to all businesses; no cap cited.
12. The 20% Pass-Through Deduction (§199A) Made Permanent
Keeps 20% QBI deduction.
13. Estate and Gift Tax Exclusion Raised to $15M Per Taxpayer Effective 2026
Removes potential 50% reduction permanently -- makes higher exemption permanent and indexed for inflation going forward.
14. Opportunity Zones for Capital Gains Deferral - New Series Approved
Permanently extends Opportunity Zones and introduces a new series of designated zones with deferral of original gain through 2023. Enhanced incentives for rural Zones. Further details to be issued.
15. Capital Gains Tax Step-Up Preserved
Maintains the step-up in basis for inherited assets, avoiding capital gains tax at death.
16. Repeal Clean Energy Credit
Eliminates green-energy credits (EVs, solar, wind, hydrogen, etc.), some as early as September 30, 2025.
17. 529 Plan Expansion
Permits 529 withdrawals for K-12 tuition, apprenticeships, homeschool; no stated income cap.
If you have any questions about these updates, please contact BakerAvenue.