A summary as of May 19th, 2025.
Before you ask, no, we are not talking about our founder, Bill Strand! You may have heard of “the one big beautiful bill,” that recently advanced through the House’s Budget Committee. You might also add “redux” to the title because its primary aim is to prevent the sunsetting of many tax-related provisions of the 2017 Tax Cuts and Jobs Act.
We’ve summarized some of the proposed items below. At the same time, it’s not an exhaustive list, as many provisions are included in the whopping 1,116-page bill. If you are interested in reading the condensed bill, please help yourself! Although, we may have some questions about your mental state. We’ve included a link below to a condensed version that is only 47 pages.
Read the Condensed One Big Beautiful Bill Here
We know this is an exhilarating read, so hold onto your hats!
Extension of Current Tax Brackets: The proposal seeks to extend the modified federal income tax brackets established by the Tax Cuts and Jobs Act, which are set to expire after December 31, 2025. These tax brackets will adjust for inflation in 2026.
Standard Deduction Changes: The current standard deduction, which is set to expire, will become permanent. Additionally, it will be adjusted for inflation moving forward through the tax years 2025 through 2028. Seniors over 65 would receive an additional $4,000 standard deduction for tax years 2025 through 2028, depending on your income.
Increased Estate Tax: The bill permanently extends the estate and lifetime gift tax exemption to $15 million per person ($30 million for married filing jointly) in 2026. The exemption will adjust for inflation going forward.
Increases State & Local Tax Deduction (SALT): The current SALT cap limits individual deductions for state and local taxes to $10,000 (or $5,000 for married taxpayers filing separately). The proposed provision would increase the SALT cap to $30,000 ($15,000 for married taxpayers filing separately), with a phase-down method for high earners (MAGI over $400,000, or $200,000 for married filing separately). The provision aims to make the SALT cap permanent after 2025. It includes measures to prevent tax avoidance, clarify tax lists, and ensure proper allocation of tax payments among partnerships and S corporations.
Maintains Qualified Residence Interest Deduction: The deduction for qualified residence interest will permanently be capped to the first $750,000 in home mortgage debt.
Introduces No Tax on Tips: The bill creates an above-the-line deduction for qualified tips received by an individual who traditionally receives tips during a given year. The deduction is allowed from 2025 to 2028.
Introduces No Tax on Overtime: Similarly, this provision creates an above-the-line deduction for overtime premium pay during a taxable year. The deduction is allowable from 2025 to 2028.
Personal Exemptions Repealed: The deduction for personal exemptions, which is scheduled to return in 2026, will be permanently eliminated under this proposal.
Maintain the Child Tax Credit: The child tax credit will remain at $2,000 per child, with provisions to maintain and index the credit for inflation.
Qualified Business Income Deduction: The provision makes the 20% deduction for qualified business income permanent beyond 2025.
Extends the Paid Family & Medical Leave Tax Credit (PFML): The PFML credit is set to expire at the end of 2025. The bill makes the PFML tax credit permanent.
Refundable Adoption Credit: The adoption tax credit is currently capped at $16,810, depending on your income. The credit is non-refundable. This provision makes the adoption credit partially refundable up to $5,000.
529 Plan Additions: The provisions expand the use of 529 savings plans to cover additional educational expenses for elementary, secondary, and homeschool, as well as certain postsecondary credentialing expenses, allowing tax-exempt distributions for a broader range of educational costs.
Introduces MAGA Accounts: The legislation creates Money Accounts for Growth and Advancement (MAGA accounts) for children under eight, allowing contributions from parents and entities, with federal contributions of $1,000 for newborns from 2024 to 2028. Account holders cannot access funds until age 18, with specific withdrawal rules for education, business, and home purchases, while distributions are taxed based on the purpose.
Introduces Additional Qualified HSA Expenses: The proposal permits individuals to use HSA funds for fitness memberships and instructional physical activity, allowing up to $500 per year for individuals and $1,000 for families, with a monthly limit of one-twelfth of the annual amount.
Limits Medicare Coverage to Certain Individuals: The provision proposes restricting Medicare eligibility to Lawful Permanent Residents, certain Cuban immigrants, and individuals in the U.S. through a Compact of Free Association, excluding illegal immigrants.
Terminates the Previously-Owned Clean Vehicle Credit: The tax credit for previously-owned clean vehicles, currently available until December 31, 2032, will expire on December 31, 2025.
Terminates the Clean Vehicle Credit: The credit for new clean vehicles, which provides up to $7,500, will also expire in 2025. Additionally, a special rule for 2026 will limit credits to manufacturers that have sold fewer than 200,000 new clean vehicles by the end of 2025.
Terminates the Qualified Commercial Clean Vehicles Credit: This credit, applicable to commercial vehicles, will be terminated by 2025, though vehicles under binding contracts established before May 12, 2025, may still qualify.
Terminates the Energy Efficient Home Improvement Credit: The expiration will shift to 2025, impacting home energy efficiency upgrades credits.
Terminates the Residential Clean Energy Credit: This credit covers various renewable energy technologies and will also have its expiration moved to 2025.
Terminates the New Energy Efficient Home Credit: The provisions for energy-efficient home construction credits will similarly be accelerated to 2025, with some exceptions for homes under construction before May 12, 2025.
Increase Limitation on Public Debt: The provision increases the statutory debt limit by $4 trillion, following its establishment on January 2, 2025, after a previous suspension period.
As calculated by the Tax Foundation, the overall impact would be an increase in the Gross National Product by 0.05% and a shrinkage in wages by 0.1%. The Foundation is more optimistic about the federal deficit than other sources; it estimates that the total budget deficit would rise by only $3.3 trillion over the next ten years.
Of course, this bill is not yet law. It is heading to the Senate, which may have its own ideas about some of these provisions. So, similar to you, we have to wait and wait, and likely wait some more. But rest assured, once we hear more definitive details or another major update, we’ll keep you posted!
As always, do not hesitate to reach out with any questions. We are here to help!