On May 22, 2025, the U.S. House of Representatives passed a sweeping 1,116-page bill titled “The One, Big, Beautiful Bill”.  The legislation will now head to the Senate, where it will likely be modified further. Congressional GOP leaders have stated they want to send the final bill to President Trump’s desk for signature by July 4.   

This comprehensive legislation seeks to extend and revise several major provisions of the Tax Cuts and Jobs Act of 2017 (TCJA), passed during President Trump’s first term in office, many of which are scheduled to expire at the end of 2025. Below is a summary of the key tax provisions included in the bill, including recent Senate updates as of May 22: 

TCJA Individual Tax Provisions Extended or Made Permanent

• Extension of Modification of Rates - Makes the TCJA tax rates permanent and modifies the inflation adjustment mechanism for the various brackets.
• Increased Standard Deduction- Makes the TCJA’s increased standard deduction amounts permanent and temporarily boosts the standard deduction from 2025 through 2028 by $2,000 for joint filers, $1,500 for head of household filers, and $1,000 for all other filers.
• Increased Child Tax Credit - Makes permanent the TCJA’s increased and enhanced child tax credit and temporarily increases the maximum credit from $2,000 to $2,500 per child for taxable years 2025-2028.
• Increased Estate and Gift Tax Exemption Amounts - Permanently increases the lifetime estate and gift tax exemption to $15 million per person ($30 million if married), subject to inflation adjustments after 2025.
• Termination of Overall Limitation on Itemized Deductions - Permanently eliminates the overall cap on itemized deductions and replaces it with a provision requiring taxpayers to reduce the value of itemized deductions claimed against the top individual income tax rate (37%) by 2/37.
• Limitation on Deduction for Qualified Residence Interest - Permanently sets the limit for mortgage interest deductions at $750,000, includes the treatment of mortgage insurance premiums as qualified residence interest, and permanently excludes home equity indebtedness from the definition of qualified residence interest.
• Termination of Miscellaneous Itemized Deductions - Permanently eliminates the Sec. 67(g) deduction for “2%” miscellaneous itemized deductions.
• Extension of current alternative minimum tax (AMT) rules – Makes the TCJA’s increased AMT exemption amount and phaseout thresholds permanent. 

TCJA Business Tax Provisions Extended or Made Permanent 

• Deduction for Qualified Business Income and Permanent Enhancement - Increases the Sec. 199A deduction for qualified business income from 20% to 23%, adjusts the phase-in thresholds, and expands eligibility to include qualified business development company (BDC) interest dividends.
• 100% Bonus Depreciation (1/19/2025) - Reinstates the 100% first-year (bonus) depreciation for property acquired and placed in service after January 19, 2025, and before January 1, 2030.
• 163(j) Return to EBITDA Standard - For the interest expense limitation, reinstates the EBITDA-based calculation (excluding depreciation, amortization, and depletion) for tax years beginning after December 31, 2024, and before January 1, 2030.
• Excess Business Loss Limitations - Makes permanent the limitation on excess business losses of a taxpayer other than a corporation but also provides that any excess business loss is carried forward as an excess business loss rather than a net operating loss (NOL). This effectively provides a permanent disallowance of any excess business losses until the taxpayer has other business income. 

New Individual Tax Provisions 

• No Tax on Tips - Creates a new above-the-line tax deduction of up to $25,000 for tips that an individual receives and are included on Form W-2, 1099-K, or 1099-NEC (subject to limitations). The deduction is not available to employees whose prior-year compensation exceeded $160,000, with the threshold adjusted annually for inflation beginning in 2025.*Passed the Senate on May 20 – Separate from the House bill. The House bill does not limit the deduction to $25,000. 
• No Tax on Overtime - Establishes a new above-the-line deduction that allows individuals to deduct qualified overtime compensation received during the tax year, subject to certain limitations. The deduction is not available to employees whose prior-year compensation exceeded $160,000, with the threshold adjusted annually for inflation beginning in 2025.
• Enhanced Deduction for Seniors - Creates a temporary 'senior bonus' deduction of $4,000 for individuals aged 65 and older (and eligible spouses on joint returns), available to both itemizers and standard deduction filers, with the deduction phasing out for taxpayers with adjusted gross income over $75,000 ($150,000 for joint filers).
• No Tax on Car Loan Interest - Establishes an above-the-line deduction of up to $10,000 for qualified interest paid on passenger vehicle loans, subject to various restrictions, including a requirement that final vehicle assembly occur in the United States. The deduction would phase out for taxpayers with modified adjusted gross income exceeding $100,000 for single tax payers, $200,000 for married couples filing jointly.
• 529 Plan Rule Changes - Expands the definition of ‘qualified higher education expenses’ under Sec. 529 plans to include certain costs associated with enrollment or attendance at K-12 public, private, or religious schools, as well as homeschooling and post-secondary credentialing programs.
• Reinstatement of Partial Deduction for Charitable Contributions of Individuals Who Do Not Elect to Itemize - Reinstates a partial above-the-line deduction for certain charitable contributions made by individuals who do not itemize, allowing up to $150 for single filers and $300 for joint filers.
• Trump Accounts - Establishes Trump Accounts, which are tax-advantaged savings accounts for U.S. citizen children under the age of 8 at the time the account is opened. Contributions of up to $5,000 per account per year (indexed for inflation) are allowed, and distributions before age 18 are prohibited without penalties.
• Trump  Accounts Contribution Pilot Program - Directs the federal government to make a one-time $1,000 contribution per child to a Trump  account for U.S. citizens born in 2024 through 2028.
• New Opportunity Zone Investments - Allows for the designation of additional qualified Opportunity Zones in effect from January 1, 2027, through December 31, 2033, with tax preferential modifications. 
• SALT Limitation Increase to $40,000 – Makes and state and local tax (SALT) deduction cap permanent at a higher threshold of $40,000, phasing down to $10,000 at a rate of 20 percent beginning at modified adjusted gross income of $250,000 for single filers and $500,000 for joint filers.
• SALT PTET Workarounds Prevented Starting After 12/31/25 - Eliminates SALT cap workarounds by modifying the definition of 'specified taxes' subject to the cap. Pass-through entity tax (PTET) payments for service-related and investment management partnerships and S corporations would be classified as ‘specified taxes’ and must be reported as separately stated items. 
• Removal of Residential Green Energy Tax Credits After 12/31/25 - Terminates the residential energy-efficient home improvement credit (Sec. 25C) and the residential clean energy credit (Sec. 25D) for property placed in service after 2025.
• Itemized Deduction Limitations – Itemized deductions would be limited for taxpayers in the 37%bracket.
  

• Deduction of Domestic Research and Experimental Expenditures - Restores immediate deductibility of domestic research or experimental expenditures for amounts paid or incurred in taxable years beginning after December 31, 2024, and before January 1, 2030. 
• New 179 Expense Limitations - Increases the maximum amount a taxpayer may expense under Sec. 179 to $2.5 million and increases the phaseout threshold amount to $4 million.
• Return to $20,000 1099-K Reporting Threshold - Reverts to the previous Form 1099-K reporting threshold, requiring third-party settlement organizations to report only if a participating payee’s aggregate transactions exceed $20,000 in value and 200 in number within a calendar year. 
• 1099 Reporting Threshold Increase from $600 to $2,000 - Raises the information reporting threshold for certain business-related payments and service remuneration to $2,000 per calendar year (up from $600), with the threshold indexed annually for inflation beginning in 2027.
• Removal of Recent Green Energy Tax Credits After 12/31/25 - Repeals or phases out a large number of clean-energy provisions, including the clean vehicle credits and credits for certain clean energy property (i.e., solar, wind, geothermal, fuel cell, etc.).  

This new legislation signals major shifts in the tax landscape for both individuals and businesses. As this bill advances through Congress, we anticipate further adjustments before final passage. We will continue to monitor updates. If you have any questions about these changes and how they affect your tax situation, please contact us.