What the One Big Beautiful Bill Means for Your Taxes: Key Takeaways for Individuals, Estates, and Businesses

On the heels of intense legislative negotiations, the One Big Beautiful Bill Act (OBBBA) has officially been signed into law, ushering in one of the most significant overhauls of the tax code in recent memory. The legislation includes a wide range of provisions affecting individual taxpayers, estates, and businesses.

At Evolved, we’ve broken down the key elements of this sweeping law to help you understand what’s changing, what’s staying, and how you can prepare.

Individual Tax Changes: Expanded Benefits and New Deductions

Bracket Adjustments & Standard Deduction

• The expiring rate and bracket changes have been made permanent. The law also increases the inflation adjustment by an extra year for the 10%, 12%, and 22% brackets.
• The expanded standard deduction is now permanent, increasing in 2025 to:
  
  
  • $31,500 for joint filers
  • $23,625 for heads of household
  • $15,750 for all other filers
    (All amounts indexed annually for inflation.)
    
    
• The personal exemption elimination is now permanent.

New, Temporary Deductions (2025–2028)

• A new $6,000 senior deduction is available per qualifying individual, phasing out at a MAGI of $75,000.
• Up to $25,000 in tip income is deductible for workers in customarily tipped industries.
• Up to $12,500 of overtime pay (or $25,000 for joint filers) is deductible for all eligible workers.
• Auto loan interest (up to $10,000) is now deductible for new vehicles with U.S. final assembly.

Child Tax Credit 

• The Child Tax Credit is made permanent with an increased max of $2,200 starting in 2026, inflation-adjusted thereafter.

SALT Cap & Itemized Deduction Limits

• The SALT deduction cap rises temporarily to $40,000 in 2025, increasing 1% per year through 2029, with a phaseout starting at $500,000 of income. The cap will return to $10,000 in 2030.
• The $750,000 mortgage interest deduction cap is now permanent.
• The value of itemized deductions is limited to 35 cents on the dollar for top-bracket taxpayers.
• A 0.5% floor applies to itemized charitable deductions.
• A new above-the-line charitable deduction of $1,000 (or $2,000 for joint filers) is now permanent.
• The bill permanently disallows miscellaneous itemized deductions (except educator expenses), certain moving expenses (except for military/intelligence), and limits personal casualty loss deductions.

AMT & Miscellaneous Changes

• The AMT exemption increases are now permanent, with phaseout thresholds reset to $500,000 (single) and $1 million (joint), adjusted for inflation.
• Select green energy credits for individuals (e.g., EV and home energy efficiency) are repealed starting after 2025 or one year from enactment.

Estate & Gift Tax Provisions: Higher Thresholds Ahead

Beginning in 2026, the estate and lifetime gift tax exemption will increase permanently to:

• $15 million for single filers
• $30 million for joint filers

Business Tax Provisions: Expanded Deductions, Simplified Rules

Expensing & Depreciation

• Immediate expensing for domestic R&D is restored permanently.
  • Small businesses (under $31 million in gross receipts) can retroactively expense R&D after Dec. 31, 2021.
  • All others may accelerate R&D deductions over 1–2 years for 2021–2024.
• 100% bonus depreciation for short-lived assets is back permanently.
• New temporary full expensing for certain structures is available for projects beginning after Jan. 19, 2025, and placed in service by Jan. 1, 2031.

Interest Deduction Rules

• The EBITDA-based interest deduction limitation is reinstated permanently.

Pass-Through Entities (Section 199A)

• The 20% deduction for qualified business income is now permanent.
• The phase-in thresholds are expanded by $50,000 (single) and $100,000 (joint).
• A minimum deduction of $400 is guaranteed for material participants with $1,000+ of QBI.

Corporate Charitable Contributions

• Corporations now face a 1% floor on charitable deductions.

Key Takeaways: What OBBBA Means for You

The One Big Beautiful Bill Act introduces wide-ranging changes with something for nearly everyone:

• Individuals benefit from larger deductions, more generous credits, and expanded eligibility for specific write-offs.
• High-net-worth taxpayers can plan around a larger estate tax exemption.
• Businesses, especially small and mid-sized firms, enjoy greater expensing, bonus depreciation, and a more favorable QBI landscape.
• Many green energy incentives are curtailed or narrowed, signaling a realignment in federal energy tax policy.

Next Steps

With many provisions taking effect in 2025, now is the time to assess how these changes impact your personal or business tax strategy. Our team at Evolved is here to guide you through this new environment with customized planning, compliance support, and forward-looking insights.