The tax landscape just shifted, again. On July 4, 2025, President Donald Trump signed the Senate-passed version of the One Big Beautiful Bill Act (OBBB) into law, following a narrow 218–214 House vote and a tie-breaking Senate vote cast by Vice President JD Vance. With this new law, sweeping and permanent changes to the tax code are now in effect, impacting virtually every taxpayer, business, and advisor across the country.
The OBBB cements many of the core provisions from the Tax Cuts and Jobs Act (TCJA) and introduces several new tax priorities from the Trump administration. From eliminating income tax on certain tips and overtime pay to reshaping international taxation and scaling back clean energy incentives, this legislation represents the most comprehensive tax overhaul since 2017.
Most provisions take effect beginning in tax year 2025, with select items applying retroactively (e.g., R&D expensing to 2022) or immediately (e.g., Employee Retention Credit enforcement).
At Porte Brown, we’ve reviewed the new law in depth. Below is a detailed breakdown of the key provisions now in effect and what they mean for your tax strategy.
The bill locks in the TCJA tax rate structure permanently, removing the sunset cliff that was looming in 2025. Taxpayers can now rely on these brackets as a stable planning foundation. The legislation also adds an extra year of inflation indexing to prevent bracket creep, particularly beneficial for those hovering near the 22% or 24% thresholds.
The TCJA-era standard deduction amounts are made permanent and retroactive to 2025, providing immediate and long-term benefit. For 2025, the deduction increases to $15,750 for single filers and $31,500 for joint returns, with inflation indexing thereafter.
The SALT deduction cap increases to $40,000 through 2029, with a phasedown for high-income taxpayers, then reverts to $10,000 in 2030. Crucially, PTET workarounds were preserved, ensuring pass-through business owners in high-tax states can continue to plan around SALT limitations.
Section 199A is made permanent at 20%, with expanded income phase-ins and a new $400 minimum deduction for qualifying small business owners. This is a lasting win for entrepreneurs and flow-through entity owners.
The credit increases to $2,200 per child beginning in 2025 and remains refundable up to $1,400. Higher phaseouts (unchanged from TCJA) keep the benefit available for a wider range of taxpayers.
Starting in 2026, the lifetime estate and gift tax exemption permanently increases to $15M per person ($30M MFJ), indexed. This eliminates the rush to gift before sunset provisions and gives planners more room for strategic transfers.
AMT exemptions stay elevated, but the phaseout accelerates at a faster 50% rate. High-income earners with incentive stock options or large gains should reevaluate AMT exposure.
100% expensing is back, permanently for qualified property placed in service after January 18, 2025. This supports capital reinvestment and tax-efficient growth strategies.
The limit rises to $2.5 million with a phaseout beginning at $4 million, helping small businesses expense more of their equipment purchases.
Domestic R&D expenses are again immediately deductible, retroactive to 2022 for certain businesses. Foreign R&D remains subject to 15-year amortization.
Reverting to the EBITDA-based formula (pre-2022), the new rule gives capital-intensive businesses broader interest deductibility once again.
A new 100% deduction is introduced for qualified production property, and the advanced manufacturing credit rises to 35% for eligible investments starting in 2026.
Exclusion increases to 75% for QSBS held four years, 100% for five years, reviving one of the most powerful tax incentives for founders and investors.
The bill simplifies and renames GILTI and FDII, aligning them to a flat 14% effective rate. This shift removes complex formulas and may streamline modeling for multinational clients. Deemed paid credits rise modestly, while the BEAT rate nudges up from 10% to 10.5%. Overall, the changes tighten policy but are less expansive than originally proposed.
The bill phases out or repeals dozens of clean energy incentives, including EV credits, home energy upgrades, and solar investment credits. However, the clean fuel production credit (Sec. 45Z) survives through 2029, with sourcing restrictions, and limited support remains for nuclear power and U.S.-based energy production. Businesses in energy-intensive sectors will need to revisit assumptions and project timelines.
Signed into law on July 4, The One Big Beautiful Bill Act is a sweeping and complex piece of legislation, but one that brings clarity and permanence to several cornerstone tax provisions. Whether you’re planning for 2025 or beyond, it’s time to re-evaluate entity structures, compensation strategies, capital investments, and client-specific opportunities under the new rules.
At Porte Brown, we’re already recalibrating our models and preparing new planning tools to ensure our clients stay ahead of the curve. Let’s talk strategy.