One Big Beautiful Bill Act and what it means for you

Written By Jessie Vasquez

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. What it does for tax law purposes is cement many of the provisions in the Tax Cuts and Jobs Act (TCJA) into the tax code, making them permanent. It also creates several new tax law provisions that take into effect beginning in 2026 and in 2025.

Most notably, the following TCJA tax provisions have become permanent:

  1. Income tax brackets under the TCJA — highest federal tax rate is 37 percent

  2. Qualified business income deduction under IRC section 199A

  3. One-hundred percent bonus depreciation for assets placed in service

  4. Mortgage interest limitation of $750,000

  5. Child tax credit is $2,200 (maximum and not indexed for inflation)

Temporary provisions that will be in effect from 2025-2028:

  1. Senior deduction for taxpayers over age 65 in 2025 is $4,000. This essentially replaces the old exemption deduction removed by the TCJA

  2. Personal car loan interest deduction, limited to $10,000 and only available for vehicles with final assembly in the USA

  3. Qualified overtime income exemption

  4. Qualified tip income exemption

Temporary provision for 2025-2029 for state and local income tax (SALT) itemized deduction of $40,000. The maximum SALT deduction will return to $10,000 in 2030.

There are many more tax law provisions in the OBBBA available to teachers, self-employed individuals, and real estate investors not covered above. I will be covering more of the provisions in detail and with examples in future posts.

What this means for you is that you should be proactive and have all your necessary tax documents available before meeting with your tax preparer. Be wary if your tax preparer is not aware of all the OBBBA tax law changes and if he or she doesn’t ask you more questions than usual during the 2026 tax season!

Jessie Vasquez