💡 Beauty Lies in the Eye of the Beholder
How pretty can the “One Big Beautiful Bill” get for you?
On July 4, 2025 the One Big Beautiful Bill (OBBB) became law. Below is a jargon-free rundown of the changes most likely to touch your everyday life and your business. Note AGI-based caps, max deductions and phaseouts in the table below.
👥 Key Changes for Individuals & Families
- 💸
Bigger paychecks for some workers- No federal tax on tips or overtime earned from Jan 1, 2025–2028. Expect larger take-home pay. You will still pay Social Security and Medicare taxes on these earnings. [IRS.gov]
- 👶
Child Tax Credit jumps to $2,200 per child. [USAFacts] - 📈
Lower tax brackets and almost-doubled standard deduction from 2017 are now permanent, benefiting those who take the standard deduction. [USAFacts, Tax Foundation]
- ⏰
Options to time your deductions- SALT deduction cap rises from $10,000 to $40,000 for households under $500K AGI (2025–2029). [Tax Foundation]
- 🔧
Deduct up to $10,000 of car-loan interest on qualified vehicles used for business.
- 👵
Extra break for seniors- New $6,000 “senior bonus” ($12,000 for married couples 65+), phasing out at $75K/$150K and ending at $175K/$250K. [IRS.gov]
- 💼
Good news for small businesses & side hustles- 100% write-off for equipment, software, and R&D is now permanent. [Tax Foundation]
- 💰
20% pass-through deduction for S-corps, partnerships, and sole props remains. [Tax Foundation]
- ⚠️
Caveats & things to plan around- 🌱
Green-energy credits (EV & solar) are being rolled back. [Tax Foundation]
- 🌱
🗒️ Quick to-do list for 2025 filings:
- 🗓️ Time your 2025 property-tax payments to maximize the SALT cap.
- 🔧 Pull forward equipment purchases to take full advantage of 100% expensing.
- 👶 Parents of babies born 2025–2028: open a “Trump Account” for the $1,000 bonus. [Tax Foundation]
| Topic | Years Active | Annual Cap | Income Phaseout Threshold |
|---|---|---|---|
| Tips Deduction | 2025–2028 | $25,000 | $150,000 MAGI ($300K joint) |
| Overtime Deduction | 2025–2028 | $12,500 (Single), $25,000 (Joint) | $150,000 MAGI ($300K joint) |
| Child Tax Credit | 2025–2029 | $3,000 per child ($3,600 <6 yrs) | $200K MAGI ($400K joint); full by ~$240K (~$440K) |
| SALT Deduction | 2025–2029 | $40,000 (indexed 1% annually) | $500K MAGI; full phase-out by $600K |
| Car Loan Interest Deduction | 2025–2028 | $5,000 per year | $100K MAGI ($200K joint); phased out by $125K ($250K joint) |
| Senior Deduction (Age 65+) | 2025–2028 | $6,000 (Single), $12,000 (Joint if both 65+) | $75K MAGI ($150K joint); phased out by $175K ($250K joint) |
💬 Final Thought
The bill may be “beautiful” or not, depending on your situation—but with smart planning, you can make the most of its prettier parts. Call us if you want to discuss further.
📞 Need help navigating these changes?
Accountit, CPA is here to help you make sense of it all.
This post is for general information only and does not constitute individual tax advice.
