The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces a variety of changes to tax law. While many provisions from the 2017 Tax Cuts and Jobs Act (TCJA) remain in effect, the OBBBA also includes new tax breaks — and eliminates others. Understanding these changes can help you plan strategically, whether you are an individual taxpayer or a business owner.
For Individuals
TCJA Provisions Made Permanent
The OBBBA preserves individual income tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) that have been in place since 2018. It also maintains the near doubling of the standard deduction, which for 2025 is:
- $15,750 for single filers
- $23,625 for heads of household
- $31,500 for joint filers
The standard deduction will be indexed to inflation in future years, and the personal exemption remains permanently eliminated.
Other TCJA provisions made permanent include:
- Federal gift and estate tax exclusion: $15 million for individuals, $30 million for married couples beginning in 2026, with annual inflation adjustments
- Child tax credit: $2,200 per eligible child under 17 in 2025, indexed to inflation starting in 2026
- Elimination of miscellaneous itemized deductions (except unreimbursed educator expenses)
- Moving expense deductions limited to military and intelligence community members
- Personal casualty deduction limited to federally and some state-declared disasters
SALT and Homeowner Deductions
- SALT deduction cap increases to $40,000 for 2025–2029, with 1% annual inflation adjustments (subject to income-based phaseouts); returns to $10,000 in 2030
- Home mortgage interest deduction permanently reduced to $750,000 ($375,000 for separate filers), including mortgage insurance premiums; mortgages originated before December 16, 2017, are "grandfathered" under the previous higher limit of up to $1 million ($500,000 for separate filers)
- Interest on home equity debt remains deductible, provided the funds are used to buy, build, or improve the property
New Deductions and Credits
- Tip and overtime income: Deduct up to $25,000 in tip income and $12,500 in qualified overtime pay (2025–2028), subject to payroll taxes and income limits
- Vehicle loan interest: Above-the-line deduction of up to $10,000 for new, personal-use U.S.-assembled vehicles (2025–2028), income phaseouts apply
- Charitable contributions for non-itemizers: Above-the-line deduction up to $1,000 for single filers, $2,000 for joint filers starting in 2026; applies to cash contributions only
- Senior bonus deduction: Effective 2025-2028, taxpayers 65+ may deduct an additional $6,000 ($12,000 for married couples filing jointly if both spouses are 65+); income phaseouts apply
Clean Energy Incentives Ending
- Tax credits for electric vehicle purchases expire after September 30, 2025
- Tax credits for energy-efficient home improvements expire after 2025 For
Business Owners
Retirement Plans and Contributions
The OBBBA does not change the ability of business owners to implement or continue tax-efficient retirement strategies, including 401(k)s, SEP IRAs, or profit-sharing plans. Reviewing contribution limits and plan design can help optimize tax outcomes.
Clean Energy and Equipment Deductions
- Section 179D deduction for energy-efficient commercial buildings ends for new property construction beginning after June 30, 2026
- Qualified commercial clean vehicle credit ends for vehicles acquired after September 30, 2025
- Businesses should review any remaining clean energy credits for eligible property acquired before these deadlines
Business Property and Tax Planning
- Section 179 and bonus depreciation strategies remain critical for equipment acquisitions and capital investments
- SALT limitations, casualty loss rules, and employee-related deductions may impact business owners differently than individuals
Other Considerations
Business owners should also evaluate payroll, fringe benefits, and other deductions that may interact with new individual provisions, including tips, overtime pay, and senior employee benefits. A comprehensive review with a tax or financial advisor can help identify opportunities and avoid surprises.
To learn more about the One Big Beautiful Bill and how tax planning may fit into your overall wealth strategy, listen to our upcoming Frank Wealth Insights podcast episode, dropping September 30th. For guidance from our independent team at Return on Life® Wealth Partners, contact us today for a complimentary, no-obligation consultation.
About Return on Life® Wealth Partners
Return on Life Wealth Partners is an independent Registered Investment Advisor (RIA) founded in 1994, headquartered in Cleveland. The team provides comprehensive wealth planning services to individuals, families, and business owners. By examining clients’ lives before their money, Return on Life® aligns advice with personal values. This approach also extends to corporate and institutional retirement plan services available through 401(k) Prosperity®.
Important Information
This blog post is for informational and educational purposes only and does not constitute investment, legal, or tax advice. Return on Life® Wealth Partners is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The views and opinions expressed are those of the author(s) and do not necessarily reflect the official policy or position of the firm. Any strategies discussed may not be suitable for all individuals and are not guarantees of future results. Investing involves risk, including the possible loss of principal.
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