The One Big Beautiful Bill Act: What the 2025 Tax Law Means for Your Clients

Part of our 2025 Tax Law Changes guide — the complete breakdown of the One Big Beautiful Bill Act.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, delivering the most significant federal tax changes since the 2017 Tax Cuts and Jobs Act (TCJA). For CPAs, Enrolled Agents, and tax preparers, the headline is that the individual tax cuts scheduled to expire at the end of 2025 were made permanent — and several brand-new deductions were layered on top.

The major individual changes

• TCJA rates made permanent. The seven-bracket structure (10% to 37%) and the higher standard deduction no longer sunset after 2025.
• A new deduction for tips and a new deduction for overtime pay, both temporary and subject to income phase-outs.
• An additional senior deduction for taxpayers age 65 and older, available for a limited window and phased out at higher incomes.
• A temporary deduction for car-loan interest on qualifying U.S.-assembled vehicles.
• An increased state and local tax (SALT) cap, raised well above the prior $10,000 limit for most taxpayers, with a phase-down for high earners and a scheduled reversion.
• An increased Child Tax Credit, made permanent and indexed for inflation.

The major business changes

• 100% bonus depreciation restored on a permanent basis.
• Higher Section 179 expensing limits.
• Immediate expensing of domestic research (Section 174) restored.
• The Section 199A qualified business income deduction made permanent.

Estate, energy, and reporting

The estate and gift tax exemption was set at roughly $15 million per person and made permanent, ending the scheduled 2026 cliff. At the same time, many clean-energy and electric-vehicle credits from the Inflation Reduction Act were terminated or accelerated to an early end. Information-reporting thresholds for Forms 1099-K and 1099-NEC/MISC were also adjusted.

What preparers should do now

Every one of these provisions has its own effective date, phase-out, and — in many cases — an expiration date a few years out. Build a client-by-client checklist, revisit projections and withholding, and flag the temporary deductions so clients understand they may not last. The rest of this series walks through each change in detail.

This article is educational and current as of its publication date. Federal tax provisions — including dollar thresholds, phase-outs, and effective dates — change frequently and many items described here are temporary. Confirm the current statute, IRS guidance, and your client’s facts before relying on any point below. This is not legal or tax advice.