The U.S. Senate has passed President Donald Trump’s monumental “One Big Beautiful Bill Act” following a dramatic 50-50 standoff that was ultimately resolved by Vice President JD Vance’s tie-breaking vote. This comprehensive domestic policy package now returns to the House of Representatives, where its prospects remain uncertain despite a Republican majority. The bill’s future hinges on overcoming intraparty divisions and legislative obstacles. This Bill’s journey has continued to surprise us, so we do not see the House preventing its ultimate passage.
The Senate Vote and the Bill’s Legislative Journey
The Senate’s approval was achieved after nearly two full days of debates, procedural confrontations, and a lengthy “vote-a-rama” over dozens of amendments. In one of the more theatrical moments, Senate clerks were required to read all 940 pages of the bill aloud, as Democrats sought to delay proceedings. Among Republicans, only Senators Susan Collins, Thom Tillis, and Rand Paul opposed the legislation. The bill now returns to the House, where a razor-thin Republican majority and strong ideological differences make its path forward anything but certain.
Major Tax Provisions of the “One Big Beautiful Bill”
The following are the highlights of what we consider to be the major tax provisions in this Bill. This is not an exhaustive list. We will provide more detailed information once a final Bill is passed.
Individual Tax Provisions
Income Tax Rates and Structure
Permanent Extension of TCJA Tax Brackets
· Current rates maintained: 10%, 12%, 22%, 24%, 32%, 35%, and 37%
· Effective date: Permanent extension beginning January 1, 2026
Standard Deduction Enhancement
· Senate version: Increases to $16,000 (single), $32,000 (married filing jointly), $24,000 (head of household)
· House comparison: Added $1,000/$2,000 temporary boost through 2028
· Effective date: Permanent extension with increases beginning 2026
· Additional feature: Enhanced inflation adjustment mechanism
Family-Related Tax Benefits
Child Tax Credit Expansion
· Senate amount: $2,200 per child (up from current $2,000)
· House comparison: $2,500 through 2028
· Effective date: Increases to $2,200 beginning 2025, indexed for inflation starting 2026
· Permanency: Senate version makes expansion permanent
· Limitation: Maintains income phase-outs and Social Security number requirements
Senior Tax Deduction
· Senate amount: $6,000 additional deduction for seniors earning up to $75,000
· House comparison: $4,000 deduction
· Effective date: Available beginning tax year 2025
· Eligibility: Low- and middle-income seniors with specific income thresholds
Alternative Minimum Tax (AMT)
Permanent AMT Relief
· Exemption amounts: Maintains higher TCJA exemption levels
· Phase-out thresholds: $500,000 (single), $1 million (married)
· Effective date: Permanent extension preventing 2026 reversion
· Indexing: Separate inflation adjustment mechanism
State and Local Tax (SALT) Deduction
Temporary SALT Cap Increase
· Senate cap: $40,000 (increased from $10,000)
· Duration: Five years (2025-2029), reverting to $10,000 in 2030
· Income limitation: Phase-down for taxpayers earning over $500,000
· House comparison: Permanent $40,000 cap with different phase-out structure
Campaign Promise Tax Provisions
No Tax on Tips
· Senate deduction: Up to $25,000 annually
· Eligible industries: Traditional and customarily tipped occupations
· Effective dates: Tax years 2025 through 2028
· Phase-out: Begins at $150,000 AGI ($300,000 for joint filers)
No Tax on Overtime
· Senate deduction: Up to $12,500 ($25,000 for joint filers)
· Coverage: Premium portion of overtime compensation
· Effective dates: Tax years 2025 through 2028
· Phase-out: Same income thresholds as tip deduction
Auto Loan Interest Deduction
· Amount: Up to $10,000 deduction
· Eligibility: New vehicles with final assembly in the United States
· Effective dates: Tax years 2025 through 2028
· Income limits: Phase-out beginning at $100,000 (single), $200,000 (joint)
Estate and Gift Tax
Enhanced Estate Tax Exemption
· Exemption amount: $15 million per individual (up from $13.99 million)
· Effective date: Beginning 2026
· Indexing: Permanent inflation adjustment
· Impact: Prevents scheduled reversion to approximately $7 million in 2026
Charitable Giving Provisions
Universal Charitable Deduction
· Senate amount: $1,000 above-the-line deduction ($2,000 for joint filers)
· House comparison: $150 temporary deduction through 2028
· Effective date: Senate version permanent, House version temporary
· Eligibility: Available to all taxpayers, not just itemizers
Corporate Charitable Giving Floor
· Requirement: Minimum 1% of taxable income threshold
· Maximum: 10% annual deduction cap maintained
· Impact: May discourage smaller corporate donations
Business Tax Provisions
Pass-Through Business Deduction (Section 199A)
· Senate Version: 20% Rate Maintained
· Rate: Remains at 20% (versus House proposal of 23%)
· Minimum deduction: New $400 minimum for taxpayers with at least $1,000 QBI
· Effective date: Permanent extension beginning January 1, 2026
· Threshold increases: Phase-in limits raised to $75,000 ($150,000 joint)
Business Interest Deduction (Section 163(j))
· EBITDA Standard Restoration
· Calculation method: Returns to more favorable EBITDA from EBIT
· Senate approach: Permanent restoration (versus House temporary through 2029)
· Effective date: Beginning after December 31, 2024
· Capitalized interest treatment: Special rules for required capitalization
Depreciation and Expensing
· 100% Bonus Depreciation
· Senate approach: Permanent restoration to 100%
· House comparison: Temporary through 2029
· Effective date: Assets placed in service after January 19, 2025
· Current law: 40% in 2025, scheduled to phase down to 0%
Research and Development Expensing
· Restoration: Full immediate expensing for domestic R&D
· Current law: Must amortize over 5 years since 2022
· Senate duration: Permanent restoration
· Retroactive: Small businesses (under $31m in revenue) effective after December 31, 2021. Requires an amended return.
· Foreign R&D: Continues 15-year amortization requirement
Section 179 Expensing Enhancement
· Maximum deduction: Increased from $1.25 million to $2.5 million
· Phase-out threshold: Raised from $3.13 million to $4 million
· Key difference: Cannot create losses (unlike bonus depreciation)
Corporate Tax Provisions
Qualified Small Business Stock (QSBS)
· Enhanced exclusion: Tiered system based on holding period
· 3-year hold: 50% exclusion (up to $15 million, increased from $10 million)
· 4-year hold: 75% exclusion
· 5-year hold: 100% exclusion
· Effective date: QSBS acquired after enactment
Revenue Impact and Fiscal Effects
Total Tax Cuts
· Overall cost: $4.5 trillion in tax reductions
· Major components: Individual rate extension ($2.2 trillion), standard deduction ($1.4 trillion), AMT relief ($1.4 trillion)
· Business provisions: Additional $165 billion annually in business tax breaks
Deficit Impact
· CBO projection: $3.3 trillion added to national debt over 10 years
· Interest costs: Total fiscal impact could reach $3.9 trillion
· Dynamic effects: Potential GDP reduction of 4.6% over 30 years
Border Security and Immigration
· $46 billion for continued border wall construction
· $45 billion to expand migrant detention to 100,000 beds
· 10,000 new ICE agents by 2029
· $10 billion for state border security initiatives
· $3.5 billion in reimbursements to state and local governments
Spending Reductions and Social Program Reforms
· Medicaid spending cut by $930 billion over a decade; tighter eligibility and work requirements imposed
· Stricter SNAP (food stamp) qualifications
· Repeal of green energy incentives (as detailed above)
Agricultural and Rural Support Measures
· Increased crop price supports for major commodities
· Expanded disaster assistance for farmers
· Extension of sugar support program through 2031
· $25 billion rural hospital stabilization fund
Additional Noteworthy Provisions
· $100 billion increase in defense spending over ten years for modernization and veteran healthcare
· 20% reduction in IRS funding plus numerous labor reduction impacts in the bill
· $30 billion in new funding for nationwide school choice and STEM education
· $15 billion for affordable housing construction and rental assistance
· Regulatory reductions for small businesses and accelerated infrastructure permitting
Debt Ceiling Increase
· National debt ceiling raised by $5 trillion, exceeding the House’s initial $4 trillion proposal
Fiscal Impact
The Congressional Budget Office estimates the bill would increase the national debt by approximately $3.3 trillion over ten years, with total costs possibly reaching $3.9 trillion after accounting for interest. Critics and supporters alike acknowledge the legislation’s transformative scope and lasting fiscal implications.
Challenges and Prospects in the House
The bill’s passage through the Senate marks only the first stage of what promises to be a contentious legislative journey. Speaker Mike Johnson’s narrow majority must contend with strong opposition from both conservative and moderate factions within the party, as well as external lobbying and public campaigns. Key disagreements—especially over the scope and effects of the tax reforms—may determine whether this vast legislative package becomes law or stalls amid political infighting.
Looking Forward
The fate of the “One Big Beautiful Bill” will reveal much about the power dynamics in the new Congress and the Republican Party’s unity. With trillions of dollars in tax cuts, spending changes, and new programs at stake, the coming weeks will likely set the tone for Trump’s second-term domestic agenda and its impact on American households, businesses, and communities nationwide.
We will continue to monitor the passage of this Bill and its impact on your specific situation. We would anticipate the ultimate passage of some form of this Bill. We will provide a detailed analysis once passed into law.
