The One, Big, Beautiful Bill was officially signed into law by President Trump on July 4, 2025. The Act has numerous implications for both individual taxpayers and businesses. Notably, it extends the business tax cuts of the Tax Cuts and Jobs Act (TCJA), expands lower tax rates for individuals, increases the estate tax exemption, and makes the small business deduction permanent. It’s important to understand how the new laws will impact your tax planning strategies for 2025 and beyond.
How Does the Enactment of the One, Big, Beautiful Bill Impact Individuals and Families?
The One, Big, Beautiful Bill is a sweeping piece of legislation that provides the largest tax cut in history for middle class and working Americans. It also significantly impacts high-net-worth individuals and families. Some of the implications of the Act for individual taxpayers include:
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Maximum annual tip income deduction of $25,000
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No tax on qualified overtime compensation of up to $12,500 per individual
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A special tax deduction for seniors up to $6,000
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A tax deduction on interest for the purchase of vehicles made in America
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Increased child tax credit from $2,000 to $2,200
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Increased standard deduction from $15,000 to $15,750 (single filers) and $30,000 to $31,500 (married filing jointly)
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Higher cap on SALT deductions of $40,000 (previously $10,000)
The legislation has also created “Trump Accounts” to help build financial security for the next generation. This is a type of tax-advantaged savings account for children born between 2025 and 2028 who are U.S. citizens. Each child will receive an initial $1,000 deposit in their account. Parents may contribute up to $5,000 a year in after-tax dollars and earnings will grow tax deferred.
How Does the New Legislation Affect Businesses?
The legislation has numerous regulatory implications across a variety of domains. Critically, it prevents a substantial tax hike on millions of small business owners and provides several notable tax cuts. The small business deduction, which was set to expire at the end of 2025, has now been made permanent.
In addition, the Act allows small businesses to fully expense business equipment purchases in the first year, removes the IRS reporting requirements on gig workers that were previously in place, and increases the 1099-MISC threshold. It also permanently extends the limitation on excess business losses and provides for a more generous Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) limitation, which effectively increases deductible interest.
Strategic Considerations for the New Tax Landscape
It’s crucial for taxpayers to reexamine their tax strategies in light of the new legislation. Although the Act provides many benefits to taxpayers, adjustments may need to be made regarding tax planning that take the new laws into account. In order to take full advantage of the legislation, individuals and businesses should work with a skilled tax advisor who can develop tailored strategies to help reduce their tax bill.
Just as individuals may need to revisit their tax strategies to ensure they maximize their tax savings, business owners should understand how the Act affects their company and industry as a whole. An owner may need to restructure their business operations to maximize their tax benefits and ensure compliance with the new laws. They might consider revisiting their entity structures to convert them to or from pass-through entities. A tax professional can assist with navigating the new tax landscape — they can also ensure compliance and help reduce a company’s tax liabilities.
Contact an Experienced Tax Professional
A diligent tax professional can help ensure you take full advantage of the tax benefits provided by the new legislation and develop a strategy to minimize your liability. Based in Fairfield, Connecticut, Rolleri & Sheppard CPAs, LLP offers strategic guidance to individuals and business owners for tax planning matters. Contact us online or call (203) 259-CPAS to schedule a consultation.
