One Big Beautiful Bill (OBBB): What You Need to Know

The recently passed One Big Beautiful Bill (OBBB) is one of the most significant tax reform packages in recent years. With sweeping updates for both individuals and small businesses, the OBBB introduces a mix of permanent and temporary tax changes that could reshape how you plan for the years ahead. Whether you’re a family looking to maximize credits, or a business owner trying to reduce taxable income, these updates create both opportunities and challenges that you’ll want to be aware of.

For Individuals & Families

• Permanent Tax Cuts: The individual rate reductions from the 2017 Tax Cuts and Jobs Act (TCJA) are now permanent.

• Child Tax Credit (CTC): Increased from $2,000 to $2,200 per qualifying child, fully refundable and inflation-adjusted.

• Expanded Standard & Senior Deductions: Standard deductions rise to approximately $15,750 (single) and $31,500 (joint). Taxpayers aged 65+ get an extra $6,000 deduction (through 2028).

• SALT Cap Raised: State and local tax deduction limit temporarily lifted to $40,000 (individuals) or $20K for married filing separately, phased out above $500K income; reverts to $10K after 2029.

• Tip & Overtime Deduction: Workers may exclude qualified tip and overtime earnings from income (up to a cap), effective 2025–2028.

• Auto Loan Interest: Deduction up to $10,000/year for U.S.-assembled cars (2025–2028), phased out for higher earners.

• Estate & Gift Tax Boost: From January 1, 2026, exemptions jump to $15M per person ($30M per couple), indexed for inflation.

• Charitable Deductions for Non-Itemizers: Starting 2026, non-itemizers can deduct up to $1,000 (single) or $2,000 (married) from charitable contributions.

• Social Security Tax Relief: Seniors (65+) may see reduced or eliminated taxation of Social Security income (2025–2028); advanced planning recommended.

For Small Businesses

• Permanent 20% QBI Deduction: The Tax Cuts and Jobs Act’s Qualified Business Income deduction (20%) is now permanent, with higher phase-in thresholds.

• 100% Bonus Depreciation: Made permanent—accelerated write-offs for qualifying business property.

• Expanded Section 179: Higher limits, immediate deduction for domestic R&D expenses, and a more favorable treatment of business interest expense.

• Compliance Changes: New 1099-style reporting for tip-related deductions, auto loans, and overtime; employers must adjust to these changes.

Bottom Line

The OBBB Act creates both permanent advantages (e.g., tax rate cuts, QBI, estate exemptions) and temporary benefits (e.g., enhanced SALT, senior deductions, tip/overtime exemptions). For individuals—especially seniors, families, and small business owners—now is a critical window to plan strategically.

Want to Learn More?

Elevate CPA & CFO is here to help you:

• Strategize on maximizing tax credits and deductions

• Navigate estate planning and QSBS opportunities

• Optimize small business depreciation, R&D, and reporting compliance

Reach out today to schedule a consultation and ensure you're taking full advantage of the OBBB provisions tailored to your financial landscape.