As “One, Big, Beautiful Bill” overcame early GOP opposition over the weekend, more details have emerged since the House approval of the bill. At that time, there were not many specifics available. As the bill moves to the Rules Committee, which can alter the bill, things have become a little clearer. The bill is focused around an estimated $5 trillion in tax cuts, phasing out of Biden-era programs, and plans to make good on Trump campaign promises.
It is essential to understand that this bill could look drastically different in its final form, but we’ve compiled a high-level overview of some key points.
Renewal and extension of key Tax Cuts and Jobs Act business and individual provisions
Much of the bill centers on making business and individual provisions from the Tax Cuts and Jobs Act (TCJA) permanent. Some of those business provisions include:
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Reinstatement of 100 percent bonus depreciation for property acquired and placed in service between 2025 and 2030
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Increased Section 179 expense limitations
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Alteration of R&D expense capitalization for domestic research
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Reinstatement of the EBITDA limitation under Sec. 163(j)
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Increased Form 1099 reporting threshold
Individual provisions include:
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Changes to the cap for SALT deductions
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Making lower TCJA individual tax rates permanent
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Increased standard deduction
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Permanent increase to estate and gift tax exemption and generation-skipping transfer tax
We will share more details on all the key provisions when the bill becomes final, but at this point, these details could change as the bill moves through its different stages.
New programs and provisions
The bill also contains programs and provisions to make good on Trump campaign promises that include:
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No tax on tips through a new deduction equal to the amount of qualified tips received and included on Form W-2
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No tax on overtime through an income deduction equal to the amount of qualified overtime compensation received during the year
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Temporary bonus deduction for ages 65 and over
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Exclusion of qualified passenger vehicle loan interest (subject to many restrictions, including final assembly)
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Permanent paid family and medical leave credit
Similar to the renewal of TCJA provisions, these new programs and provisions could be altered or eliminated as the bill moves through Congress.
Potential hurdles and the road ahead
As already seen, the bill could face internal opposition from Republicans and is almost certain to be met with resistance from Democrats. Potential hurdles range from conservatives unhappy with the extent of Medicaid spending cuts and concerns about the federal deficit and funding the bill, to those worried that the bill jeopardizes access to health coverage and food assistance.
It’s also worth noting that once the bill goes to the Senate, it could look different. Changes could be made, and the bill could be broken down into smaller bills.
Start planning for 2025
It’s time to start planning for 2025. President Trump’s tax plan will significantly affect your tax planning, so it is important to begin discussing potential changes with your trusted advisor. Please fill out the form on this page to connect with a member of our Tax Practice.