Navigating Potential Tax Reform: What You Need to Know About the “One, Big, Beautiful Bill”

Updated on June 26, 2025

Senate Unveils Changes to “One, Big, Beautiful Bill” 

Currently, the U.S. Senate is poised to vote on its version of the “One, Big, Beautiful Bill”, which includes several notable differences from the version previously approved by the House. Should the bill pass the Senate, it would then need to be approved again in its current form by the House. While Congressional leaders remain hopeful of sending the final legislation to the President by July 4th, ongoing negotiations may impact this timeline. 

 

Key Differences Under Discussion

Some of the significant proposed changes between the House and Senate versions include: 

State and Local Tax Deduction (SALT): The House proposed a $40,000 limit with a phaseout for higher incomes; the Senate is considering a $10,000 limit but is looking to negotiate this further with the House.  

Tipped Income Deduction: The House would make this deductible for certain occupations with a phaseout starting at $155,000; the Senate would limit the deduction to $25,000, with a higher phaseout threshold. 

Overtime Pay Deduction: The House proposed no cap, whereas the Senate adds a $25,000 cap for joint filers ($12,500 for singles) and begins a phaseout at higher incomes. 

Car Loan Interest Deduction: The House allows this for both new and used vehicles; the Senate limits it to new vehicles only. 

Enhanced Senior Citizen Deduction: The House included a $4,000 deduction (through 2028); the Senate increases this to $6,000 (through 2028). 

Child Tax Credit: The House would increase the credit to $2,500 per child through 2028, adjusting for inflation afterward; the Senate sets it at $2,200 per child through 2028, then adjusts for inflation. 

Charitable Contribution Deduction for Non-Itemizers: The House proposes a temporary deduction up to $300 joint/$150 single through 2028; the Senate would increase and make this permanent at $2,000 joint/$1,000 single. 

Qualified Business Income (QBI) Deduction: The House sets a 23% rate, while the Senate lowers it to 20% and introduces a new minimum $400 deduction for some filers. 

Bonus Depreciation: Both allow 100% bonus depreciation for property acquired after January 19, 2025, through 2029; the Senate would make this provision permanent. 

Research and Development (R&D) Deduction: The House allows R&D expenses to be deducted through 2029; the Senate would make this permanent and allow retroactive claims to 2022 for smaller businesses. 

Interest Expense Limitation (Section 163(j)): The House allows depreciation and amortization add-backs through 2029; the Senate would make this change permanent. 

Wind and Solar Subsidies: The House calls for repeal within 60 days of enactment; the Senate phases out credits over two years, with different timelines for various credits. 

Tax on Private Foundations: The House would impose a 10% tax on foundations with assets over $5 billion; the Senate removes this provision. 

University Endowments: The House proposes a top tax rate of 21%; the Senate lowers this to 8%.  

Debt Ceiling: The House increases the ceiling by $4 trillion; the Senate proposes a $5 trillion increase. 

 

What’s Next

We are closely monitoring negotiations and will continue to share updates and practical advice. If you have questions about how these proposed changes may affect your personal or business tax situation, please contact us. We appreciate the trust you place in us for your tax planning needs. 

 

 

 

Updated on May 22, 2025

House Passes the “One, Big, Beautiful Bill”

The U.S. House of Representatives has officially passed President Trump’s much anticipated “One, Big, Beautiful Bill” in a 215-214 vote after weeks of intense negotiations. While this is a significant milestone, it’s important to remember that the bill’s future is far from certain. The Senate is expected to introduce substantial changes, and the final version could look quite different from what the House approved.

 

Key Highlights

• The bill would make the 2017 tax cuts permanent and aims to cut $1.5 trillion in federal spending, including changes to Medicaid and repealing certain tax credits from the Inflation Reduction Act.
• The state and local tax (SALT) deduction cap for individuals and joint filers is increased to $40,000 and phases out for those making more than $500,000 per year. (This is a change from our original posting.)
• The MAGA accounts are rebranded as Trump accounts.
• The legislation now moves to the Senate, where further negotiation and modification are likely.

 

What’s Next

Our team will be tracking Senate developments closely. As always, we’ll keep you informed about what these changes could mean for you and your business.

 

 

 

Originally Posted on May 15, 2025

On May 12, the U.S. House unveiled a sweeping 389-page tax reform draft known as the “One, Big, Beautiful Bill”. While this legislation is still in draft form, and will almost certainly evolve as negotiations continue, it’s already generating significant buzz. As your trusted advisors, we want to keep you informed about the changes most likely to impact you, your family, and your business.

Let’s break down some of the most notable provisions. 

 

Individual & Family Tax Changes

Extensions and Modifications of Existing Rules: 

• Permanent Tax Cuts: The individual tax rates set by the 2017 Tax Cuts and Jobs Act (TCJA), including the 37% top bracket, would become permanent. 

• Standard Deduction: The higher standard deduction introduced by the TCJA would also be made permanent. 

• Child Tax Credit: Stays at $2,000 (indexed for inflation after 2026); temporarily increased to $2,500 per child for 2025-2028. 

• Qualified Business Income (QBI) Deduction: Made permanent and increased to 23%. 

• Alternative Minimum Tax (AMT): Higher exemption amounts and phaseouts are here to stay. 

• Mortgage Interest Deduction: Continues to apply to the first $750,000 of home acquisition debt. 

• SALT Deduction: The controversial state and local tax deduction cap is proposed to rise from $10,000 to $30,000, with a phaseout for higher earners, though this may change as negotiations continue. 

• 529 Plans: Expanded for more educational expenses, including certain credentials and homeschooling. 

• Miscellaneous Itemized Deductions: Eliminated. 

• Adoption Credit: Enhanced. 

 

New Individual Provisions

• Enhanced Senior Deduction: Filers aged 65+ could claim an extra $4,000 deduction (phasing out at higher incomes from 2025-2028). 

• No Tax on Tips or Overtime: For 2025-2028, qualifying employees could deduct tips and overtime pay from taxable income, with some income limitations. 

• Car Loan Interest Deduction: Up to $10,000 of interest paid on U.S.-assembled cars may be deductible (subject to income phaseouts). 

• Charitable Contribution Incentives: Temporary above-the-line deductions and a new credit for donations supporting educational scholarships. 

• MAGA Accounts: A new savings vehicle for children, supporting education, entrepreneurship, and first-time home-buying, with government contributions for children born 2024-2028. 

• Estate & Gift Tax: The lifetime exemption jumps to $15 million ($30 million for couples), indexed for inflation. 

 

Business Tax Provisions

• Tip Tax Credit Expansion: Now includes beauty service establishments. 

• Child Care & Family Leave Credits: Expanded and enhanced for employers. 

• HSA Improvements: Working seniors on Medicare could contribute; fitness memberships may now be HSA-eligible. 

• Bonus Depreciation: 100% for property acquired from January 2025 through 2029, with a new definition for “qualified production property.” 

• Section 179 Expensing: Limit increases to $2.5 million (phaseout starts at $4 million). 

• R&D Expenses: Fully deductible through 2029. 

• Business Interest Limitation: Returns to an EBITDA-based definition for 2025-2029. 

• Opportunity Zones: A second round is introduced, with policy adjustments. 

• Manufacturer Thresholds: Smaller manufacturers can use simplified accounting methods; the cash receipts threshold rises to $80 million. 

• Employee Retention Credit: No new claims after January 31, 2024. 

 

When Reporting, Nonprofits, & Other Notables

• 1099 Thresholds: Both 1099-K and 1099-NEC/MISC thresholds rise, reducing some compliance burdens for small payees. 

• Private Foundations: Higher excise taxes for those with $50M+ in assets. 

• Unrelated Business Income Tax (UBIT): Now applies to certain transportation and branding/licensing income. 

 

What Should You Do Now?

While these changes are still in flux, they represent a significant shift in tax policy with wide-ranging implications for individuals, families, and businesses. Here’s how to stay prepared: 

• Stay Informed: We’ll update you as the legislation evolves. 

• Evaluate Strategies: Review your current tax and business structure; opportunities (and risks) may be on the horizon. 

• Ask Questions: Our team is here to interpret how these changes affect you and to help you act proactively. 

Tax reform is always a time of both uncertainty and opportunity. While not all these provisions will become law in their current form, understanding the direction of reform helps you make better decisions today. 

If you have questions or want to discuss planning strategies, please reach out to your Simon Lever advisor. 

 

 

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified professional for guidance specific to your situation.