One, Big, Beautiful Bill Clears House, Moves to Senate Next
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- On May 23, 2025
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Discussing THE ONE BIG BEAUTIFUL BILL
In a dramatic overnight session on May 22, 2025, the House of Representatives approved President Donald Trump’s sweeping fiscal 2025 bill: the “One, Big, Beautiful Bill Act of 2025” (OBBBA), by a vote of 215–214. Passed through budget reconciliation, the bill marks a significant extension of the 2017 Tax Cuts and Jobs Act (TCJA), broadening individual and business tax provisions such as lower rates, enhanced standard deductions, and full expensing of capital investments.
The House Rules Committee drove the process with 21 hours of continuous debate to meet Speaker Mike Johnson’s Memorial Day deadline. Celebrating the passage, President Trump declared on Truth Social, “This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!”
Below is the breakdown of key tax changes for individuals and businesses, and when they take effect.
Excise Tax on Remittances
| Provision | Current Law | Change Under the Bill | Effective Date |
| Excise Tax on Remittance Transfers | No federal excise tax currently applies to outbound remittance transfers. | Imposes a 3.5% excise tax on outbound remittances by non-US citizens. The tax is collected quarterly by remittance providers, who hold secondary liability for unpaid amounts. Exemptions apply for remitters who are verified U.S. citizens or nationals using qualified providers. | Tax years beginning after December 31, 2025 |
Business Tax Provisions
Depreciation, Expensing, and Interest Deductions
| Provision | Current Law | Change Under Bill | Effective Date |
| Bonus depreciation (Sec.168(k)) | 40% expensing in 2025; phasing out by 2027 | Restore 100% expensing for acquisitions between 1/20/2025–12/31/2029 | 2025–2029 |
| R&D expensing (Sec.. 174) | All R&D expenditures (both domestic and foreign) must be amortized over 5 years (15 years for foreign R&D). Immediate expensing was repealed under the TCJA. | Permits full expensing of domestic research and experimental expenditures for tax years 2025–2029. However, foreign R&D expenditures must still be amortized over 15 years. | 2025–2029 |
| Section 179 limit | $1.27M expensing, $2.54M phaseout (2024) | Increase to $2.5M expensing, $4M phaseout (indexed) | 2025 onward |
| Business interest deduction (163(j)) | 30% of taxable income (EBIT basis) | Allows 30% deduction based on EBITDA again through 2029 | 2025–2029 |
International and Corporate Taxes
| Provision | Current Law | Change Under Bill | Effective Date |
| OECD Pillar 2 global tax | The U.S. planned to implement a 15% minimum tax abroad | Repeals U.S. commitment to Pillar 2 (protects $120B U.S. investment) | 2025 onward |
| GILTI deduction | Currently set at 50%, scheduled to decrease to 37.5% | Deduction restored and adjusted to 49.2% | Permanent (from 2026 onward) |
| FDII Deduction | Currently set at 37.5%, scheduled decrease to 21.875% | Deduction restored and adjusted to 36.5% | Permanent (from 2026 onward) |
| BEAT (minimum tax) | The 10% minimum tax on big companies making payments to foreign affiliates was supposed to rise to 12.5% in 2026 | Adjusted BEAT rate applied: 10.1% | 2026 onward |
The One, Big, Beautiful Bill reverses these sunset provisions, effectively locking in lower tax rates on FDII and GILTI.
Pass-Through Income and Business Rates
| Provision | Current Law | Change Under Bill | Effective Date |
| Pass-through (Sec.. 199A) deduction | 20% of qualified business income | 23% of qualified business income, permanent | 2026 onward |
| SALT deduction (pass-through) | Owners could deduct up to $10k by entity | Taxed like other individuals under the new SALT cap | 2026 onward |
| Business AMT | Phased out for corporations | Extend TCJA repeal of corporate AMT permanently (so none) | Permanent |
Individual Tax Provisions
Income Tax Rates and Alternative Minimum Tax (AMT)
| Provision | Current Law (2025 and beyond) | Change Under Bill | Effective Date |
| Income tax rates & brackets | TCJA rates expire after 2025, revert to higher rates (e.g., 39.6%) | TCJA rates/brackets are permanent (top rate 37%), index annually | Tax years beyond 2026 |
| AMT exemptions | TCJA AMT exemptions expire after 2025 | Permanently retain higher AMT exemption levels (relief for ~8 million filers) | 2026 and beyond |
Standard Deduction and Personal Exemptions
| Provision | Current Law | Change Under Bill | Effective Date |
| Standard deduction (single/married) | $13,000/$26,000(filing jointly) in 2025 (TCJA level); due to cut by $15,000 for families after 2025 | Permanently keep the higher TCJA deduction; add an extra $1–$2k (e.g., $2,000 extra for joint filing) through 2028 | Tax years 2025–28 (boosted); 2026+ (maintained) |
| Personal exemptions | $0 (eliminated by TCJA) | Remains $0 (no change) | N/A |
State and Local Tax (SALT) Deduction
| Provision | Current Law | Change Under Bill | Effective Date |
| SALT deduction limit | $10,000 per year (per return) for state and local income/property taxes. | Increases cap to $30,000 (per return), phased back to $10k for households with AGI above $400,000 (Married filers individually: $15k cap with phase-down above $200k, and floor $5k.) |
2026 onward |
| SALT for pass-through entities | Some owners could deduct SALT payments via the entity | Denies SALT deduction for members of partnerships/S‑corps | 2025 return onward |
Child, Family, and Other Credits
The bill raises the Child Tax Credit to $2,500 per child (indexed, 2025–2028) and makes the Adoption Credit partially refundable. New MAGA child savings accounts provide a one-time $1,000 deposit for children born between 2024–2028, with up to $5,000/year in contributions and tax-free withdrawals for education, housing, or retirement. Childcare and paid leave credits are expanded through 2026, with added small business relief. Additionally, it exempts tips, certain overtime pay, and auto loan interest from taxation between 2025–2028.
Wealth Transfer and Estate Taxes
| Provision | Current Law | Change Under Bill | Effective Date |
| Estate (death) tax exemption | ~$12.92M per person (2023), reverting to ~$6.5M in 2026 | Permanently set at $15M (inflation-indexed) for estates & gifts | 2026 onward |
| AMT exemptions | Higher TCJA exemptions expire in 2025 | Keep TCJA’s higher AMT exemption amounts (no cut) | 2026 onward |
With the House passage of the One Big Beautiful Bill, the spotlight now shifts to the U.S. Senate. Its final shape remains uncertain, and key provisions are still subject to negotiation. But one thing is clear: if this sweeping tax package crosses the finish line, it will lock in the Trump-era tax cuts and usher in a new era of pro-growth tax reforms. A full Senate vote may come by late June or early July.
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