The One Big Beautiful Bill Act (H.R. 1) — Key Take‑Aways at a Glance
(signed July 4 ‑ the first major federal tax law since 2017’s TCJA)
1. Individual‑side highlights
| Topic | What the new law does | When it applies | Source |
|---|---|---|---|
| Tax‑rate brackets | Makes the 2017 TCJA rate schedule permanent (no 2026 “snap‑back” to higher pre‑TCJA rates). | 2025 forward | journalofaccountancy.com |
| Standard deduction | Permanently sets higher base amounts and indexes them: $15,750 (single); $31,500 (MFJ) for 2025. | 2025 forward | journalofaccountancy.com |
| SALT deduction cap | Raises the cap to $40,000 for 2025, then $40,400 for 2026 and +1 % per year through 2029; reverts to $10k in 2030. | 2025‑2029 | journalofaccountancy.comcongress.gov |
| Child tax credit | Increases base credit to $2,200 / child and makes the $1,400 refundable portion permanent; keeps $200k/$400k phase‑out thresholds indexed. | 2025 forward | journalofaccountancy.com |
| Senior deduction | New temporary $6,000 deduction per taxpayer age 65+; phases out at MAGI $75k/$150k; ends after 2028. | 2025‑2028 | asppa-net.org |
| Roth IRA rules | Accounts stay alive. Only the income phase‑out for annual contributions resets to: Single $150k–165k; MFJ $236k–246k (indexed). Back‑door conversions untouched. | 2025 forward | journalofaccountancy.com |
| “No‑tax” breaks for workers | Above‑the‑line deductions of up to $25,000 tips + $12,500 OT pay (double for joint filers); phase‑out begins at MAGI $150k/$300k. | 2025‑2028 | journalofaccountancy.com |
| Estate & gift exemption | Permanently lifts unified exemption to $15 million ($30 million MFJ) starting 2026. | 2026 forward | congress.gov |
2. New Trump Accounts for minors (IRC § 530A)
Tax‑deferred IRA‑type accounts only for those under 18.
Contribution cap $5,000/yr (inflation‑indexed after 2027).
Treasury can auto‑open accounts for newborns; a one‑time $1,000 federal seed credit for babies 2025‑2028.
No withdrawals before the calendar year the child turns 18 (except full rollover to an ABLE account).
Does not count toward the child’s Roth or traditional IRA limits, but FAFSA will treat it like a student asset.
First contributions can be made 12 months after enactment (i.e., no earlier than July 2026). congress.govjournalofaccountancy.com
3. Business & investment provisions
| Area | Change | Source |
|---|---|---|
| QBI (§199A) deduction | Made permanent at 20 %; wider wage‑/‑cap phase‑in corridor (up to $75k/$150k). | journalofaccountancy.com |
| Bonus depreciation | Restored to 100 % expensing for qualified property placed in service on/after 19 Jan 2025 and made permanent. | journalofaccountancy.com |
| § 179 expensing | Cap raised to $2.5 m (phase‑out begins at $4 m). | journalofaccountancy.com |
| R&D (§ 174) | Allows immediate write‑off of U.S. R&E outlays again (retro‑option for 2022‑24 costs). | journalofaccountancy.com |
| Interest (§ 163(j)) | Returns to EBITDA base beginning 2025. | journalofaccountancy.com |
| Advanced‑manufacturing credit | Investment credit rate jumps to 35 % for property placed in service after 2025. | journalofaccountancy.com |
| Opportunity zones | Program made permanent; enhanced reporting and new penalties for non‑filers. | congress.gov |
| Clean‑energy roll‑backs | A long list of IRA‑era credits (clean vehicles, §45Y/48E, etc.) sunset between 9‑30‑2025 and 12‑31‑2027. | journalofaccountancy.com |
4. International & large‑corporate items
GILTI & FDII renamed and equalized at a 14 % effective rate; §960 deemed‑paid credit bumped to 90 %.
BEAT rate nudged to 10.5 % (lighter than earlier Senate draft).
Stricter foreign‑entity restrictions on several clean‑energy and nuclear incentives. journalofaccountancy.com
5. Compliance & administrative tweaks
| Provision | New rule | Source |
|---|---|---|
| Form 1099‑K | Threshold reverts to >$20k AND >200 txns (was scheduled to drop to $600). | journalofaccountancy.com |
| General 1099 reporting | Floors lifted to $2,000 (indexed) for many pay‑with‑business‑payments. | rothcocpa.com |
| ERC promoters | New $1,000 penalty per failure + due‑diligence mandate. | journalofaccountancy.com |
| Remittance transfers | 1 % excise tax on outbound cash remittances. | journalofaccountancy.com |
6. Planning pointers
Roth strategy: high‑income households still have back‑door and mega‑back‑door conversions; only direct contributions are limited.
Kids’ savings stack: a child with earned income may have both a Trump account and a custodial Roth IRA and a 529.
Small‑biz expensing: permanent 100 % bonus plus higher § 179 cap simplifies cap‑ex timing decisions.
Clean‑tech investors: re‑model PTC/ITC deals—many incentives disappear within 24‑36 months.
Watch the calendar: most changes kick in 1‑1‑2025; some (Trump accounts, R&D retro‑election) require Treasury or IRS guidance first.
Bottom line: The Act locks in the TCJA baseline, sprinkles new middle‑class and senior relief, introduces a child‑focused “Trump account,” and tilts strongly toward domestic manufacturing while clawing back many green‑energy subsidies. Early tax‑planning conversations for 2025 should center on Roth contribution eligibility, SALT timing, and accelerated capital‑investment or R&D spending.
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The information provided in this post is for educational and general informational purposes only and does not constitute legal, tax, financial, or other professional advice. Laws, regulations, and interpretations are subject to change frequently and may vary by jurisdiction. You should not rely solely on this information when making decisions affecting your personal circumstances. Please consult with a qualified attorney, tax advisor, or financial professional for advice specific to your situation. The transmission or receipt of this information does not create an attorney-client relationship or any other professional relationship. This post may be considered advertising under applicable state laws.
