Key Tax Provisions from the One Big Beautiful Bill Act

The following table is the key tax provisions from the One Big Beautiful Bill Act that was signed into law on July 4^th, 2025.

Note: The table is subject to change or updates based on new guidance received.

Tax Provision	Current Law	OBBB Act (law as of 7/4/25)
Individual income tax rates	Tax Cuts and Jobs Act (TCJA) rates expire after 2025. Seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Bracket thresholds are adjusted annually for inflation.	Made TCJA rates permanent. All brackets continue to be indexed for inflation after 2025. Also adds an additional year of inflation adjustment to the end of the 10% and 12% brackets.
Standard deduction	Increased standard deduction (TCJA) expires after 2025. Single & MFS: $14,600 HoH: $21,900 MFJ: $29,200	Permanently increases the standard deduction. Effective as of Jan. 1, 2025: Single & MFS: $15,750 (indexed) HoH: $23,625 (indexed) MFJ: $31,500 (indexed)
Personal exemptions	Suspended for 2018-2025; allowed in 2026	Permanently terminates deduction for personal exemptions.
Child Tax Credit (CTC)	$2,000 per child (TCJA)	Permanent increase of $2,200 per child.
Estate and gift tax exemption	$13.61 million until 2025	$15 million for single filers, $30 million for MFJ starting in 2026.
Mortgage interest deduction	Limits the qualified residence interest deduction to the first $750,000 in home mortgage acquisition debt.	Permanently limits the qualified residence interest deduction to the first $750,000 in home mortgage acquisition debt. Now treats certain mortgage insurance premiums on acquisition indebtedness as qualified residence interest.
Casualty loss deduction	Limited to federally declared disasters (TCJA) through 2025.	Limitation permanent; however, the bill expands the provision to include certain state-declared disasters. The date for federally declared disasters to be recognized as qualified disasters is changed to 30 days after enactment.
Moving expenses deduction	Suspended 2018-2025 (TCJA) (except for Armed Forces)	Permanently terminates deduction (except for Armed Forces)
Wagering losses	Limited to itemized deduction based on the amount of winnings through 2025 (TCJA)	The bill further limits the losses from wagering transactions to 90% of the amount of those losses, only to the extent of the taxpayer’s gains from wagering transactions during the tax year.
Charitable deduction for non-itemizers (Cash deduction only)	Not available after 2021.	Charitable contribution deduction of $1,000 for single filers or $2,000 for MFJ for certain charitable contributions. It begins after 2025.
Charitable deductions for itemizers (Cash deduction only)	Can deduct a portion of their qualified charitable contributions, subject to a specific limitation based on type of contribution.	Provides a deduction only for charitable contributions to the extent they exceed 0.5% of the taxpayer’s contribution base.
No tax on tips	Tips are taxable income	Temporary deduction of up to $25,000 for qualified tips received by an individual in an occupation that customarily and regularly receives tips. Available for taxpayers who claim the standard deduction or itemize deductions. The deduction will begin to phase out when the taxpayer’s MAGI exceeds $150,000 ($300,000 for MFJ). Expires in 2028.
No tax on overtime	Overtime pay is taxable income	Temporary deduction of up to $12,500 ($25,000 for MFJ) for qualified overtime compensation. Overtime deductions are only allowed if the total amount of qualified overtime compensation is reported separately on Form W2 (or Form 1099). Available for taxpayers who claim the standard deduction or itemize deductions. The deduction will begin to phase out when a taxpayer’s MAGI exceeds $150,000 ($300,000 for MFJ). Expires in 2028.
Enhanced deductions for seniors	Additional standard deduction for ages 65+	Adds $6,000 bonus deduction for seniors. The deduction will begin to phase out when a taxpayer’s MAGI exceeds $75,000 ($150,000 for MFJ). Available for 2025 – 2028.
No tax on car loan interest	Personal interest on car loans are not deductible.	Allows deduction for up to $10,000 of interest on new car loans per year. Qualified passenger vehicle loan interest is interest paid or accrued during the tax year on indebtedness incurred by the taxpayer after Dec. 31, 2024, for the purchase of personal use. Applicable passenger vehicles must have had their final assembly in the United States. The deduction will begin to phase out when a taxpayer’s MAGI exceeds $100,000 ($200,00 for MFJ). Available from 2025 – 2028.
Adoption credit	Nonrefundable.	Makes $5,000 of the credit refundable, adjusted for inflation.
529 plan qualified expenses	Limited to higher education and $10,000 K-12 tuition.	Expands to include more K-12 and homeschool expenses, and qualified post-secondary credentialing expenses.
“Trump Accounts”	N/A – did not exist	Trump accounts will be IRAs (NOT Roth IRAs) for the exclusive benefit of individuals under 18. Contributions can only be made in calendar years before the beneficiary turns 18, while distributions can only be made starting in the calendar year the beneficiary turns 18. The bill does not allow Trump account contributions until 12 months after the date of enactment of the bill. Eligible investments would generally be mutual funds and indexed ETFs. Contributions (other than qualified rollover contributions) will be capped at $5,000 a year (adjusted for inflation after 2027). The bill creates a new Sec. 128 that allows for employer contributions to Trump accounts. These contributions will not be included in the employee’s income. Includes a pilot program where the federal government pays a one-time $1,000 credit to an account of each qualifying child born between Jan. 1, 2025 and Dec. 31, 2028.
State and local tax (SALT) cap	$10,000 cap	Retroactively increases the limit to $40,000 for 2025 and $40,400 for 2026 followed by 1% increases for 2027, 2028, and 2029. Cap will revert to $10,000 in 2030. The deduction will begin to phase out (not below $10,000) when a taxpayer’s MAGI exceeds $500,000 in 2025, $505,000 in 2026 followed by 1% increases for 2027, 2028, and 2029. No SALT limitation for pass-through entities.
Qualified Business Income (QBI) deduction	20% deduction for pass-through income. Deduction subject to phaseout for specified service trades or businesses (SSTBs)	Permanent 20% deduction. Expands deduction limit phase-in range for SSTBs and other entities subject to the wage and investment limitation by increasing it t o $75,000 and $150,000 for MFJ. New minimum $400 deduction for taxpayers that have at least $1,000 of QBI.
Dependent care assistant programs	$5,000 maximum annual amount excluded from income	$7,500 maximum
Child and dependent care credit	Tax credit is 35% of qualifying expenses.	Permanent increase tax credit to 50% of qualifying expenses. The credit rate will phase down for taxpayer’s with an AGI that exceeds $15,000. It will reduce by 1% (not below 35%) for each $2,000 exceeding $15,000 AGI. It will further reduce by 1% (not below 20%) for each $2,000 ($4,000 for MFJ) exceeding AGI of $75,000 ($150,000 for MFJ).
Sec. 25C, Energy Efficient Home Improvement Credit	30% of qualified costs, $1,200 annual limit.	Terminates for property placed in service after Dec. 31, 2025.
Sec. 25D, Residential Clean Energy Credit	30% of qualified costs	Terminates for property placed in service after Dec. 31, 2025.
Sec. 25E, Previously Owned Clean Vehicle Credit	Up to $4,000	Terminates for expenditures made after Sept. 30, 2025.
Sec. 30D, Clean Vehicle Credit	Up to $7,500 per new clean vehicle	Terminates for vehicles acquired after Sept. 30, 2025
Sec. 45L, New Energy Efficient Home Credit	Up to $5,000 per home	Terminates for homes acquired after June 30, 2026.
Form 1099 reporting threshold	$600 in a calendar year	$2,000 in a calendar year. The threshold amount to be indexed annually for inflation after 2026.