What the new tax law means for you
H.R.1, the One Big Beautiful Bill Act, was passed and signed into law, making
several expiring tax cuts permanent and introducing new temporary provisions through
2028. Both individuals and businesses are affected.
Individuals
The bill focuses on extending individual benefits that were set to sunset after
2025. Made permanent:
- Income tax rates and brackets — the seven-bracket system becomes permanent.
- Standard deduction — the doubled amounts are now permanent.
- Alternative Minimum Tax — TCJA exemption increases made permanent, with inflation adjustments.
- Mortgage interest — the $750,000 cap is made permanent.
Several deductions change:
- State and local tax (SALT) — the $10,000 cap rises temporarily to $40,000 with 1% annual increases through 2029, then reverts to $10,000 in 2030.
- Charitable deductions — from 2026, non-itemisers can claim up to $1,000 ($2,000 married filing jointly).
- Child Tax Credit — rises from $2,000 to $2,200 per child, with future inflation adjustments.
Permanently eliminated: personal exemptions remain at zero, miscellaneous itemized
deductions subject to the 2% floor (unreimbursed employee expenses, tax preparation
fees), and casualty and theft loss deductions except for federal disasters.
Entirely new provisions:
- Senior deduction — an additional $6,000 for taxpayers over 65, whether or not they itemize.
- No tax on tips — non-itemisers in traditionally tipped industries can deduct up to $25,000 of reported tips.
- No tax on overtime — a deduction for qualified overtime up to $12,500 ($25,000 married filing jointly), for non-itemisers.
- Auto loan interest — deductible up to $10,000, but only on US-assembled vehicles.
Businesses
Businesses are affected to a lesser extent, with several expiring provisions made
permanent:
- Pass-through entities — the Section 199A deduction becomes permanent, letting LLCs, S-corporations and sole proprietorships deduct 20% of business income.
- Depreciation — 100% bonus depreciation is now permanent.
- Research and development — domestic R&D can be fully expensed, replacing the requirement to amortise.
In short
The OBBBA gives individuals and businesses long-term planning certainty by making
temporary provisions permanent. Many are subject to phase-outs and income-based
limits, so read the full articles and speak to your tax adviser.
Part 1 — Individual taxes
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Part 2 — Business taxes