The tax landscape just shifted, again. On July 4, 2025, President Donald Trump signed the Senate-passed version of the One Big Beautiful Bill Act (OBBB) into law, following a narrow 218–214 House vote and a tie-breaking Senate vote cast by Vice President JD Vance. With this new law, sweeping and permanent changes to the tax code are now in effect, impacting virtually every taxpayer, business, and advisor across the country.

The OBBB cements many of the core provisions from the Tax Cuts and Jobs Act (TCJA) and introduces several new tax priorities from the Trump administration. From eliminating income tax on certain tips and overtime pay to reshaping international taxation and scaling back clean energy incentives, this legislation represents the most comprehensive tax overhaul since 2017.

Effective Dates

Most provisions take effect beginning in tax year 2025, with select items applying retroactively (e.g., R&D expensing to 2022) or immediately (e.g., Employee Retention Credit enforcement).

At Porte Brown, we’ve reviewed the new law in depth. Below is a detailed breakdown of the key provisions now in effect and what they mean for your tax strategy.

Individual Tax Provisions

Tax Rates

The bill locks in the TCJA tax rate structure permanently, removing the sunset cliff that was looming in 2025. Taxpayers can now rely on these brackets as a stable planning foundation. The legislation also adds an extra year of inflation indexing to prevent bracket creep, particularly beneficial for those hovering near the 22% or 24% thresholds.

Standard Deduction

The TCJA-era standard deduction amounts are made permanent and retroactive to 2025, providing immediate and long-term benefit. For 2025, the deduction increases to $15,750 for single filers and $31,500 for joint returns, with inflation indexing thereafter.

SALT Cap

The SALT deduction cap increases to $40,000 through 2029, with a phasedown for high-income taxpayers, then reverts to $10,000 in 2030. Crucially, PTET workarounds were preserved, ensuring pass-through business owners in high-tax states can continue to plan around SALT limitations.

Qualified Business Income Deduction

Section 199A is made permanent at 20%, with expanded income phase-ins and a new $400 minimum deduction for qualifying small business owners. This is a lasting win for entrepreneurs and flow-through entity owners.

Child Tax Credit

The credit increases to $2,200 per child beginning in 2025 and remains refundable up to $1,400. Higher phaseouts (unchanged from TCJA) keep the benefit available for a wider range of taxpayers.

Estate and Gift Tax Exemption

Starting in 2026, the lifetime estate and gift tax exemption permanently increases to $15M per person ($30M MFJ), indexed. This eliminates the rush to gift before sunset provisions and gives planners more room for strategic transfers.

Alternative Minimum Tax

AMT exemptions stay elevated, but the phaseout accelerates at a faster 50% rate. High-income earners with incentive stock options or large gains should reevaluate AMT exposure.

Other Notable Provisions for Individuals

• No Tax on Tips & Overtime - Above-the-line deductions for up to $25,000 in tips and $12,500 in overtime compensation (doubled for joint returns) through 2028.
• Car Loan Interest - Deductible up to $10,000 annually for loans on U.S.-assembled personal-use vehicles (2025–2028).
• Trump Accounts - New tax-deferred savings vehicle for minors under 18, with a $5,000 annual limit and potential government match.
• Adoption Credit - Up to $5,000 of the credit is refundable, offering liquidity for adoptive families.
• 529 Plans - Expanded to include additional secondary and postsecondary education credentials.
• Charitable Deduction - Non-itemizers can deduct up to $1,000 ($2,000 MFJ); itemizers face a new 0.5% floor.

Business Tax Provisions

Bonus Depreciation

100% expensing is back, permanently for qualified property placed in service after January 18, 2025. This supports capital reinvestment and tax-efficient growth strategies.

Section 179 Expensing

The limit rises to $2.5 million with a phaseout beginning at $4 million, helping small businesses expense more of their equipment purchases.

R&D Expensing

Domestic R&D expenses are again immediately deductible, retroactive to 2022 for certain businesses. Foreign R&D remains subject to 15-year amortization.

Business Interest Deduction

Reverting to the EBITDA-based formula (pre-2022), the new rule gives capital-intensive businesses broader interest deductibility once again.

Qualified Production Property & Manufacturing Credits

A new 100% deduction is introduced for qualified production property, and the advanced manufacturing credit rises to 35% for eligible investments starting in 2026.

Qualified Small Business Stock (QSBS)

Exclusion increases to 75% for QSBS held four years, 100% for five years, reviving one of the most powerful tax incentives for founders and investors.

Other Highlights

• Opportunity Zones and New Markets Tax Credit made permanent.
• Section 461(l) excess business loss limitation made permanent, but more restrictive carryover treatment was dropped.

International Tax Changes

The bill simplifies and renames GILTI and FDII, aligning them to a flat 14% effective rate. This shift removes complex formulas and may streamline modeling for multinational clients. Deemed paid credits rise modestly, while the BEAT rate nudges up from 10% to 10.5%. Overall, the changes tighten policy but are less expansive than originally proposed.

Clean Energy Tax Changes

The bill phases out or repeals dozens of clean energy incentives, including EV credits, home energy upgrades, and solar investment credits. However, the clean fuel production credit (Sec. 45Z) survives through 2029, with sourcing restrictions, and limited support remains for nuclear power and U.S.-based energy production. Businesses in energy-intensive sectors will need to revisit assumptions and project timelines.

Administrative & Compliance Measures

• 1099-K Reporting Thresholds - Return to $20,000/200 transaction threshold, undoing the planned $600 threshold.
• 1099-MISC Thresholds - Raised to $2,000 starting in 2027 and indexed for inflation.
• ERC Enforcement - $1,000 penalties for promoters who lack due diligence, and unpaid ERC claims filed after 1/31/24 will not be processed.
• Other Changes - Includes a new remittance transfer tax (1%), special farmland sale installment rules, and Form 1099 modernization.

Conclusion

Signed into law on July 4, The One Big Beautiful Bill Act is a sweeping and complex piece of legislation, but one that brings clarity and permanence to several cornerstone tax provisions. Whether you’re planning for 2025 or beyond, it’s time to re-evaluate entity structures, compensation strategies, capital investments, and client-specific opportunities under the new rules.

At Porte Brown, we’re already recalibrating our models and preparing new planning tools to ensure our clients stay ahead of the curve. Let’s talk strategy.