Congress Passes Major Tax Bill: What Businesses and Individuals Need to Know
Karen Snodgrass
CPA | CK Principal
On July 3rd, Congress passed the sweeping One Big Beautiful Bill Act (OBBBA). This bill is a landmark tax and spending package that makes key provisions from the 2017 Tax Cuts and Jobs Act (TCJA) permanent, introduces significant changes for businesses and individuals, and redefines international tax and alters clean energy incentives. The bill was signed into law by President Trump over the July 4th holiday weekend.
With so many changes packed into one bill, understanding the immediate and long-term effects is essential. We also recognize that more guidance will come in the way of Regulations that will interpret these rules. Below, we’ve outlined some of the most impactful provisions and what they could mean for you or your business.
Key Takeaways at a Glance
TCJA extensions made permanent, including bonus depreciation and qualified business income deductions.
Enhanced tax relief for businesses—particularly around interest deductions, R&D, and pass-through income.
Significant international tax reforms, affecting GILTI, FDII, and foreign tax credits.
Clean energy incentives scaled back, with phaseouts on many recent credits.
Major changes for individuals, including updates to the SALT cap, standard deduction, and child tax credit.
Estate exemption increased to $15 million and made permanent.
New planning opportunities for qualified opportunity zones, small business stock, and charitable giving.
Tax Law Changes for Individuals
Key updates for individuals include:
SALT Cap Increased: Now $40,000 for joint filers through 2029, with phase-outs for high earners.
Standard Deduction & Tax Brackets Made Permanent: Increased for inflation, bringing stability to long-term planning.
Child Tax Credit: Higher credit amounts and partially refundable, with further expansion in 2026.
Charitable Giving: New opportunity for a charitable deduction for taxpayers that do not itemize. Also, a new floor is introduced – potentially reducing the tax deduction for contributions starting in 2026.
Above-the-Line Deductions for Tips and Overtime: Temporary but potentially valuable for certain workers. Keep in mind there are specific requirements based on income levels and the type of occupation of the worker.
Enhanced Standard Deduction for Seniors: Although touted as eliminating tax on social security, the increased standard deduction means fewer seniors will pay tax on their social security benefits, but there was no change in the taxability of benefits.
Car Loan Interest: A new deduction is available for qualified interest paid on certain autos – as long as final assembly occurred in the US.
New “Trump Accounts”: Tax-advantaged savings accounts for children, including a $1,000 government-funded deposit for qualifying births.
Estate/Gift Tax Exemption: Raised to $15 Million (per individual) and made permanent.
QSBS (Qualified Small Business Stock) Gains Exclusion Enhanced: Potential for 100% exclusion now starts after 5 years of holding.
New Opportunity Zone Rules: Expanded benefits for long-term rural and urban investments, but with new requirements.
What Businesses Need to Know Now
If you own or manage a business, several provisions in the OBBBA could immediately improve cash flow and reduce tax liabilities:
100% Bonus Depreciation Returns: Businesses can again fully expense qualified assets in the year they’re placed in service, beginning January 20, 2025. Assets acquired before that date are subject to the prior bonus depreciation provision.
Business Interest Deduction: Reverts to the more generous EBITDA-based limitation calculation.
R&D Expensing: Domestic research costs can now be expensed immediately, and previously capitalized amounts from 2022–2024 can be accelerated for qualifying taxpayers.
Pass-Through Deduction (199A): Made permanent, with a wider phase-in range for income thresholds.
Charitable Giving Limits: A new 1% floor for corporations means only contributions above 1% of taxable income are deductible.
OBBBA overhauls the U.S. approach to international taxation:
GILTI and FDII Renamed and Adjusted: Lower deduction rates and tightened eligibility.
Foreign Tax Credits: Significant changes to how FTCs are calculated and sourced.
BEAT Changes: New permanent 10.5% rate, but some R&D and renewable credits remain protected.
Downward Attribution Restored: Impacts CFC status and reporting obligations for many multinational structures.
If your business has a global footprint, coordinate with your CK tax advisor soon to determine how these changes affect your effective global tax rate and compliance burden.
Major Clean Energy & Sustainability Credits Winding Down
The OBBBA substantially scales back clean energy incentives introduced by the Inflation Reduction Act (IRA):
EV, Solar, Wind, and Home Energy Credits are scheduled to terminate between 2025–2027.
Hydrogen and Carbon Capture Credits are narrowed, with stricter qualification rules.
New Transferability Rules for remaining credits give businesses more planning options.
Consider fast-tracking clean energy investments and projects to ensure eligibility before key expiration dates. Also, keep tabs on the news, as recent commentary from President Trump suggests further scaling back.
What Should You Do Next?
The OBBBA includes both immediate and long-term provisions. For many businesses and individuals, it could reduce estimated taxes as early as Q3 2025. But the real value comes from aligning your tax, business, and wealth strategies around these sweeping changes.
Businesses should re-evaluate capital expenditures, R&D planning, and entity structure decisions in light of these changes. Now is also the time to revisit your personal tax and wealth strategy, especially if you own a business, anticipate large charitable contributions, or are considering estate planning moves.
We recommend:
Meeting with your Cray Kaiser tax advisor soon to understand how the OBBBA affects your unique situation.
Reviewing your 2025 tax projection in light of the changes.
Revisiting long-term planning goals, including expansion, R&D, charitable giving, and estate transfers.
Questions? We’re Here to Help
Whether you’re navigating new compliance requirements or rethinking your business strategy, the Cray Kaiser team is ready to guide you through the opportunities and implications of the One Big Beautiful Bill Act. You’ll be hearing more from us soon as we do a deeper dive into the nuances of the Act.
