Signed into law on July 4, 2025, the “One Big Beautiful Bill Act” (BBB) marks a significant evolution in U.S. tax legislation. Building on the foundation of the 2017 Tax Cuts and Jobs Act (TCJA), this legislation makes key provisions permanent while introducing several new measures impacting individuals, businesses, and international operations.
🔍 For Individuals:
- Permanent Tax Cuts: The 37% top tax rate stays, avoiding a reversion to 39.6%.
- Itemized Deduction Limits: The Pease limitation is repealed, but a 35% cap applies.
- Charitable Deduction Floor: Donations must exceed 0.5% of AGI to be deductible.
- SALT Cap Increase: Raised to $40K (2025–2029), then back to $10K.
- 199A QBI Deduction: Made permanent with expanded thresholds and a $400 minimum deduction.
- QSBS Gain Exclusion: Expanded caps and phase-in holding period rules.
- Estate & Gift Tax Exemption: Permanently increased to $15 million.
🏢 For Businesses:
- EBITDA-Based Interest Deduction Restored: More favorable calculations under Section 163(j).
- R&D Immediate Expensing: For domestic activities, with retroactive and accelerated options.
- Full Expensing of Qualified Property: 100% deduction for eligible domestic investments.
- Section 179 Cap Raised: From $1M to $2.5M.
🌍 International Changes:
- GILTI & FDII Adjustments: Reduced deductions but broadened credit applicability.
- Foreign Tax Credit Changes: More credits, fewer restrictions on allocations.
- Base Erosion Tax Adjustment: Rate fixed at 10.5% (lower than projected).
- Controlled Foreign Corporations (CFCs): Restoration of prior ownership rules simplifies compliance.
Why This Matters From small businesses to multinational corporations, the BBB brings opportunities and complexities. Now is the time to evaluate how these changes will impact your financial planning, deductions, and compliance strategy.
📞 Need help navigating the new tax landscape? Contact Verity CPAs at info@verity.cpa or 808.546.5026 to discuss how we can support your goals.