The U.S. House of Representatives recently passed the expansive “One, Big, Beautiful Bill Act” (OBBBA) by a narrow 215-214 vote. This broad legislative package extends many tax provisions from the Tax Cuts and Jobs Act (TCJA) that are currently set to expire and introduces new tax breaks aimed at both businesses and individuals. While the bill is now headed to the Senate, where it faces potential revisions, the proposed provisions already offer important insight into the direction of upcoming tax policy.

Below is a summary of some of the bill’s most significant tax-related provisions.

Key Business Tax Provisions

Bonus Depreciation Restored
The bill proposes to reinstate 100% bonus depreciation for qualified assets placed in service between January 19, 2025, and December 31, 2029. This reverses the current phase-out schedule, which would otherwise bring bonus depreciation down to 0% by 2027

Permanent Qualified Business Income Deduction
The Section 199A QBI deduction, currently set to expire after 2025, would become permanent under OBBBA. Moreover, the deduction rate would increase from 20% to 23% for tax years starting in 2026, offering the potential for a lower effective tax rate for pass-through business owners.

Expanded Section 179 Expensing
The bill increases the maximum Section 179 expensing limit to $2.5 million and raises the phaseout threshold to $4 million for property placed in service after 2024. These figures would continue to be adjusted annually for inflation.

Revived R&D Deduction
Taxpayers would regain the option to immediately deduct domestic research and experimental expenditures from 2025 through 2029, reversing the current requirement to amortize those costs over time. The bill also allows a choice between immediate deduction or amortization, depending on taxpayer preference.

Excess Business Loss Limitation Made Permanent
Originally scheduled to sunset after 2028, the limitation on noncorporate taxpayers’ ability to deduct excess business losses would be made permanent. Losses exceeding the limit would still be carried forward under the net operating loss rules.

Individual Taxpayer Changes

Tax Rates Locked In
The current TCJA income tax rates—including the 37% top marginal rate—would become permanent. Without legislative action, the top rate is scheduled to revert to 39.6% in 2026.

Standard Deduction Boost
For tax years 2025 through 2028, the standard deduction would temporarily increase by $2,000 for joint filers, $1,500 for heads of household, and $1,000 for single filers. An added deduction of $4,000 would also apply to certain qualifying seniors.

Expanded Child Tax Credit
The Child Tax Credit would be permanently set at $2,500 per child from 2025 through 2028, with a return to $2,000 thereafter (adjusted for inflation). Importantly, SSNs would continue to be required for both the child and the taxpayer claiming the credit.

Increased SALT Deduction Cap
The bill would raise the cap on the state and local tax (SALT) deduction from $10,000 to $40,000 in 2025, phasing it out for high-income earners (over $500,000). Starting in 2026, the cap would increase by 1% annually through 2033.

Miscellaneous Deductions  
The suspension of miscellaneous itemized deductions (such as unreimbursed business expenses) would be made permanent.

Estate Tax Changes

The federal estate and gift tax exemption would increase to $15 million starting in 2026 and continue to adjust for inflation annually.

New Proposals from the Campaign Trail

Deductions for Tips and Overtime Pay
Workers would be eligible for above-the-line deductions on both tip income and overtime pay that are included in their gross income from 2025 through 2028 (without needing to itemize). A SSN would be required to claim these deductions.

Car Loan Interest Deduction
Taxpayers could deduct up to $10,000 of interest on qualified car loans for vehicles assembled in the U.S., applicable from 2025 through 2028. Income limits would apply.

Charitable Contribution Deduction Expansion
The bill introduces a modest deduction for charitable contributions by nonitemizers—$150 for single filers and $300 for joint filers.

What Comes Next?

The OBBBA faces considerable scrutiny in the Senate, and its final version may change significantly.

At Maxwell Locke & Ritter, we’re closely monitoring the developments in Washington so we can help our clients prepare for whatever comes next. Let’s talk about how these changes may affect your tax strategy. Contact ML&R to schedule a conversation.