You’ve no doubt heard a lot about the “One Big Beautiful Bill.” This sweeping legislative proposal is designed to streamline and simplify a range of tax, financial, and regulatory measures into a single, comprehensive package. While the name may sound lighthearted, the bill itself carries serious implications for taxpayers, business owners, and financial professionals alike. In this post, we’ll break down what’s inside the bill, touching on the important tax provisions for individuals and business owners alike.
The bill has, by a slim margin, been approved by the United States House of Representatives. The United States Senate, specifically the Senate Finance Committee, has released proposed language of their ‘version’ of the bill; however, the Senate as a whole has yet to vote on the proposed legislation.
While the language of the different versions of this bill are in many ways consistent, addressing a large variety of topics, there are important differences. Below you’ll find a breakdown of the important tax implications of bills and how they differ –
Extension of individual provisions that originated with the Tax Cuts and Jobs Act (TCJA).
Many of the tax provisions of the TCJA are set to expire at the end of 2025. The text of both legislative vehicles looks to address the sunset of these provisions for individual taxpayers.
| Provision/Tax Topic | House Version | Senate Version |
| Lower tax brackets (10, 12, 22, 24, 32, 35 and 37) |
Provision made permanent. | Provision made permanent. |
| Elimination of personal exemption | Provision made permanent but allows a temporary $4,000 deduction for seniors age 65 and older after 2024 and before 2029. | Provision made permanent but allows a temporary $6,000 deduction for seniors age 65 and older after 2024 and before 2029. |
| Increased alternative minimum tax (AMT) exemption and threshold | Provision made permanent. | Provision made permanent. |
| Lower limitation on the deduction of mortgage interest | Provision made permanent. | Provision made permanent with mortgage insurance premiums qualifying as residence interest for purposes of the deduction. |
| Increased standard deduction | Provision made permanent with annual increase outlined in the text of the bill. | Provision made permanent with annual increase outlined in the text of the bill. |
| State and Local Tax (SALT) deduction | Increases limitation from $10,000 (under TCJA) to $40,000 with annual increases until 2033. | Increases limitation from $10,000 (under TCJA) to $40,000 with inflationary increases. |
| Child tax credit | Provision made permanent with a temporary increase to $2,500 through 2028 and including inflationary adjustments after 2028. | Increase the base credit to $2,200 including inflationary adjustments. |
| Estate tax exclusion | Provision made permanent with increase in base exclusion to $15 million for decedents dying in 2026 and including inflationary adjustments after 2026. | Provision made permanent with increase in base exclusion to $15 million for decedents dying in 2026 and including inflationary adjustments after 2026. |
| Educator expenses | Not addressed. | Allows for unreimbursed educator expenses to be deduction as a miscellaneous itemized deduction (currently capped at $300 as an above the line adjustment). |
New individual provisions
There has been a large amount of media coverage on the tax changes promised during the Trump administration’s most recent election campaign. These new provisions address many of the more widely talked about changes.
| Provision/Tax Topic | House Version | Senate Version |
| No tax on tips | Provides a deduction from income for amounts received as tips. | Provides a deduction from income for amounts received as tips with deduction capped at $25,000. |
| No tax on overtime | Provides a deduction from income for amounts received as overtime pay. | Provides a deduction from income for amounts received as overtime pay. |
| Automobile loan interest deduction | Allows for a deduction of up to $10,000 for interest paid on automobile loans in 2025 through 2028. | Allows for a deduction of up to $10,000 for interest paid on automobile loans in 2025 through 2028. |
| Trump accounts | Creates tax-favored accounts for newborn children, seeded with $1,000. | Creates tax-favored accounts for newborn children, seeded with $1,000. |
Business provisions
The TCJA created a number of largely tax beneficial changes to legislation. As with the individual provisions above, many of these are set to sunset after 2025. Both houses of Congress have addressed many of these expiring provisions.
| Provision/Tax Topic | House Version | Senate Version |
| Bonus depreciation | Provides for 100 percent bonus depreciation through 2029 for property acquired post January 19, 2025. | Provides for 100 percent bonus depreciation through 2029 for property acquired post January 19, 2025. |
| Research and experimental expenditures | Reinstates the deduction for domestic research and experimental expenditure costs incurred after 2024 through 2029 (taxpayers can elect to amortize). | Makes permanent the deduction for domestic research and experimental expenditure costs, allowing certain taxpayers a retroactive deduction to 2022. |
| Qualified business income deduction | Provision made permanent, increasing the deduction to 23 percent of qualified business income. | Provision made permanent. |
The Senate will need to finalize and approve their version of the bill – an event that appears to be just over the horizon. Assuming this occurs, the House will need to approve the Senate bill as-is or the language of the two separate versions of the bill will need to be reconciled. This reconciliation process is typically handled in joint committee sessions and can be tedious and time-consuming.
Depending on the final differences in the two legislative texts, the bill could move quickly through the reconciliation process if required. Congress as a whole is highly motivated to take action as it relates to these provisions, which could also move the process along more quickly than is typical.
emc will continue to monitor the progress of this legislation as it is finalized in the Senate and moves toward final reconciliation and approval. If you have questions in the meantime, reach out to your advisor at emc – we’d be happy to help!