The One Big Beautiful Bill Act (OBBB) is a federal tax reform initiative aimed at modernizing the U.S. tax code. It builds on provisions from the Tax Cuts and Jobs Act (TCJA), making many temporary measures permanent while introducing new deductions, credits, and compliance rules across individual, business, energy, and international tax domains.
For Businesses:
- 100% Bonus Depreciation restored permanently for qualified property.
- Expanded Interest Deduction using a more favorable income calculation.
- Section 199A QBI Deduction made permanent with higher income thresholds.
- Immediate Deduction for R&E Expenses with retroactive options for small businesses.
- QSBS Gains now eligible for partial exclusions beginning after 3 years.
- Opportunity Zones made permanent with new zones every 10 years.
For Individuals:
- 37% Top Tax Rate & Enhanced Standard Deduction made permanent.
- SALT Deduction Cap increased to $40,000 with phase-out, reverting back to $10,000 in 2030.
- New Deductions for seniors, tips, overtime, and auto loan interest.
- Expanded 529 Plans now cover more K-12 and homeschooling expenses.
- Child Tax Credit increased to $2,200.
- Charitable Contributions now partially deductible for non-itemizers and limited for itemizers.
Estate & Gift Tax:
- Exemption Raised to $15M ($30M for couples) in 2026.
- Trump Accounts created for minors with government contributions.
Energy & International Tax:
- Accelerated Phase-Outs for clean energy credits.
- Restrictions on Foreign Entities claiming certain energy tax credits.
- Higher Effective Tax Rates for GILTI, FDII, and BEAT.
Exempt Organizations:
- Expanded Excess Compensation Tax applies to any employee earning over $1M.
- Graduated Excise Tax on college endowments based on per-student assets.
For a complete overview, we invite you to view/download LSWG’s PDF file outlining the Big Beautiful Bill