Understanding the One Big Beautiful Bill Act: What It Means for You

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing a wide range of tax changes that will affect individuals, families, and businesses for years to come. At Jones & Roth, we are committed to helping our clients navigate these changes with clarity and confidence.

Here are some of the most important updates and what they mean for you.

Key Tax Cuts Made Permanent

Several provisions from the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire at the end of 2025. The OBBBA makes many of these changes permanent, including:

• Lower individual income tax rates, with inflation adjustments to the 10%, 12%, and 22% brackets.
• An increased standard deduction: $15,750 for single & married filing separately, $31,500 for married filing jointly, and $23,625 for heads of household.
• The 20% Qualified Business Income (QBI) deduction for pass-through entities, now permanent with expanded income thresholds.

These changes provide continued tax relief for many taxpayers and offer new opportunities for long-term planning.

Business Focused Incentives

The OBBBA includes several provisions designed to support business investment and growth:

• Section 179 expensing limit increased to $2.5 million, with a phase-out threshold of $4 million. There will be inflation adjustments to take place after 2025.
• There was a permanent reinstatement of 100% bonus depreciation for qualified property placed in service after January 19, 2025.
• Advanced manufacturing investment credit increased from 25% to 35%
• Immediate expensing of domestic research and development costs reinstated.

These updates may significantly impact capital investment strategies and tax planning for business owners.

Estate and Gift Tax Exemption Increased

The federal estate and gift tax exemption is now permanently set at $15 million per individual, $30M for married couples, indexed for inflation. This change provides a valuable opportunity for high-net-worth individuals to implement or update wealth transfer strategies. It is important to understand this change does not affect estate taxes at the state level.

Changes to Energy and Sustainability Incentives

While some clean energy credits have been extended or modified, others are being phased out or eliminated. Notable changes include:

• Termination of the Clean Vehicle Credit after September 30, 2025.
• Elimination of the Residential Clean Energy Credit after 2025.
• New restrictions on foreign-influenced entities claiming certain energy credits

If you are considering clean energy investments, it is important to review your eligibility and timing.

Family and Education Related Tax Opportunities

Several provisions aim to ease the financial burden on families:

• Child Tax Credit increased to $2,200 per child, with permanent refundability and higher income thresholds.
• Allows charitable contributions of up to $2,000 for married filing joint filers and $1,000 for single or married filing separate filers, to be deductible for filers who do not itemize deductions beginning in tax year 2026.
• Adoption Credit now refundable up to $5,000.
• 529 plans expanded to cover up to $20,000 in K–12 expenses and postsecondary credentialing.
• Introduction of “Trump Accounts,” tax-exempt savings accounts for children born between 2025 and 2029, with a $1,000 government contribution

These changes may offer new planning opportunities for education and family-related expenses.

Other Personal Tax Provisions

A variety of other personal tax changes to be aware of:

• For tax years 2025 through 2028, taxpayers age 65 and older are eligible for an additional above-the-line deduction of $6,000. For married couples filing jointly, the deduction increases to $12,000 if both spouses are over age 65. Subject to income phase outs.
• For tax years 2025 through 2028, taxpayers may claim an above-the-line deduction of up to $10,000 for interest paid on loans used to purchase new passenger vehicles. To qualify, the vehicle must be assembled in the United States and must secure the loan. Subject to phaseout at higher income levels.
• For tax year 2025, the state and local tax (SALT) deduction cap is increased to $40,000 for married couples filing jointly ($20,000 for married filing separately). The deduction is subject to a phaseout for higher-income taxpayers.
• Allows an above-the-line deduction of up to $25,000 for qualified tip income earned in traditionally tipped industries (e.g., food service, beauty, and barber services). The deduction is subject to a phaseout for higher-income taxpayers.

International and Corporate Tax Updates

The OBBBA also includes significant changes for multinational businesses and corporate taxpayers:

• Modifies the rules for foreign income earned by U.S. shareholders of foreign corporations (formerly known as GILTI and FDII), including updated deduction percentages and sourcing rules.
• Sets the base erosion and anti-abuse tax (BEAT) rate permanently at 10.5% (11.5 % for financial institutions).
• Reinstates the “look-through” rule for payments between related foreign corporations, helping to avoid unintended immediate taxation under Subpart F rules.

These changes may have a significant impact on cross-border tax planning, compliance, and reporting obligations.

What You Should Do Next

The OBBBA introduces complexity alongside opportunity. Many of the OBBBA’s provisions take effect in 2026, but the time to plan is now. Whether you are a business owner or individual taxpayer, proactive planning can help you take full advantage of the new law.

To better understand how the OBBBA may impact your financial strategy, reach out to your Jones & Roth advisor for personalized guidance.