Signed into law July 4, 2025, the One, Big, Beautiful Bill Act changed deductions and credits for individuals and businesses. Here are key provisions and where to check current IRS guidance.
What Is the Big Beautiful Bill?
The One, Big, Beautiful Bill Act passed Congress and was signed into law on July 4, 2025, as Public Law 119-21. It includes changes to individual and business taxes. The summaries below describe enacted provisions, not proposals; eligibility, effective dates, and later IRS guidance matter when preparing a return.
Extension of 2017 Tax Cuts (TCJA)
The law generally makes the individual income tax rates from the 2017 Tax Cuts and Jobs Act permanent and increases the standard deduction. Dollar amounts and brackets change by tax year, so check current IRS tables rather than relying on figures from an earlier proposal.
Sources: GovInfo: Public Law 119-21 (enacted text) · IRS: One, Big, Beautiful Bill provisions
Increased SALT Deduction Cap
For 2025, the law raises the federal itemized deduction limit for state and local taxes to $40,000 ($20,000 if married filing separately), subject to an income-based reduction. The cap and income thresholds change in later years. This matters only if you itemize and otherwise qualify; check the current Schedule A instructions.
Sources: GovInfo: Public Law 119-21 (enacted text) · IRS: One, Big, Beautiful Bill provisions
Deduction for Qualified Tips
For tax years 2025–2028, eligible workers in qualifying occupations may deduct up to $25,000 of qualified tips, subject to income limits and other requirements. This is a federal income-tax deduction, not an exemption from Social Security or Medicare taxes. The IRS explains which tips and occupations qualify.
Deduction for Qualified Overtime
For tax years 2025–2028, eligible taxpayers may deduct the premium portion of qualified overtime compensation required under the Fair Labor Standards Act, up to $12,500 ($25,000 for joint filers), subject to income limits. The base hourly pay is not included, and payroll taxes still apply. Check IRS guidance and your pay records before claiming it.
Child Tax Credit Increase
The law increased the maximum Child Tax Credit to $2,200 per qualifying child beginning in 2025, subject to income, age, identification, and other eligibility rules. The actual credit and refundable amount depend on your circumstances; consult current IRS instructions.
Senior Bonus Deduction
For tax years 2025–2028, eligible taxpayers age 65 or older may claim an additional $6,000 deduction per person, subject to income and other requirements. This does not eliminate federal tax on Social Security benefits. It is separate from the existing additional standard deduction for older taxpayers.
Business Provisions
The law restored 100% bonus depreciation for certain eligible property acquired after January 19, 2025, raised Section 179 expensing limits, changed treatment of certain domestic research expenses, and made the qualified business income deduction permanent. Each rule has eligibility and timing conditions; review current IRS guidance before making a purchase or filing.
What This Means for You
These provisions are now law, but not every taxpayer qualifies and effective dates vary. For planning or filing, consult the IRS guidance linked below and speak with a tax professional about your circumstances. CPAcloud9 can help review how the enacted rules affect your return.
Primary sources and further reading
- GovInfo: Public Law 119-21 (enacted text)
- IRS: One, Big, Beautiful Bill provisions
- IRS: Deductions for workers and seniors
Tax rules depend on the tax year and individual circumstances. Confirm the current IRS guidance before filing.