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Big Beautiful Bill Tax Info
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Big Beautiful Bill Tax Center

Guidance Related to the One Big Beautiful Bill Act (“OBBBA”)

The OBBBA was signed into law July 4, 2025 and introduces a number of new tax rules designed to support individuals, families, and businesses and was established with the intention of expanding tax relief, credits, while encouraging economic growth. 

At Ascend CPA & Advisors, LLC our goal is to provide clear, practical guidance to help you take full advantage of tax benefits derived through the OBBBA. In addition, we are here to help increase your understanding of significant changes that may affect your current tax situation and help to ensure compliance with respect to the filing of your income tax returns.

Some provisions of the Big Beautiful Bill take effect beginning in 2025, and extend into future years. Other provisions will not take effect until 2026 and beyond.  To help keep you abreast of the tax code changes that take effect in 2026-2028; we will continue to provide timely updates to our website for your reference.

If you have questions about any of the items discussed below or other tax code changes or would like us to help you develop an effective tax strategy, feel free to contact our office at (702) 822-1777 or email us at support@ascendcpas.com.

Notable items to the Internal Revenue Code resulting from the passing of the new bill include, but are not limited to the following:

 

Notable Items for Individual Taxpayers:

  • Sixty-six percent of the bill’s tax cuts benefit families making less than $500,000 and are intended to increase take-home pay for a family of four, annually, by $10,900.
  • The Child Tax Credit is increased to $2,200 per child starting in 2025.
  • Adoption Tax Credit – Made partially refundable, up to $5,000 per adoption, starting in 2025. The maximum tax credit is $17,280 for 2025.
  • Increased Standard Deduction – The standard deduction will increase and be adjusted for inflation. For 2025, the deductions are: 
    • $15,750 – Single filers 
    • $31,500 – Married filing joint filers; and 
    • $23,625 – Head of Household filers. 
  • Note: For qualified taxpayers age 65 or older the standard deduction has been increased by $6,000.
  • SALT (State & Local Tax) Deduction – The cap is raised to $40,000 for 2025.  For tax year 2024 the limit was $10,000. 
  • Tips Deduction – For tax year 2025, eligible employees and self-employed individuals may deduct qualified tips. The maximum annual deduction is $12,500 for individuals and $25,000 joint filers.
  • Overtime Deduction: For years 2025 through 2028, a deduction for “qualified overtime compensation” (i.e., the “extra” half-time pay required by FLSA) is allowed. Max is $12,500 (or $25,000 if married filing jointly).
  • Educator deductions:  The OBBBA has expanded the types of items eligible for the existing educator expense deduction, which allows eligible educators to deduct up to $300 for out-of-pocket classroom expenses without itemizing.  Note: for 2026, you will also be able to claim any unreimbursed expenses as an educator as an itemized deduction with no dollar limit.
  • New Vehicle Loan Interest Deduction: Individuals may deduct up to $10,000/year in interest on auto loans for new vehicles that had their final assembly in the U.S and were purchased between Jan 1, 2025, and Dec 31, 2028.


  • New Deduction for Seniors – Qualified Individuals age 65 or older will be able to claim an additional deduction of $6,000 ($12,000 for married couples).


  • Qualifying Surviving Spouse Filing Status – If your spouse passed away in 2023 or 2024, you have a child (dependent) that lived with you all year, and you did not remarry; you may be eligible to file as qualifying spouse for tax year 2025.  If your spouse passed in 2025 and you have a child, you will be able to file married jointly for 2025 and qualifying surviving spouse for tax years 2026 and 2027.  This filing status is similar to the married jointly filing status in that the tax rates are more favorable than filing single or head of household.
  • “Trump Accounts”: The bill established a new type of tax-advantaged custodial savings account for qualifying American children born after January 1, 2025 through December 31, 2028 for whom an election is made.  Newborn children with a valid Social Security number will typically qualify.  Effective July 2026, parents/guardians will be permitted to contribute up to $5,000/yr. until the child turns 18 at which time the account will convert to a traditional IRA.
  • Clean Vehicle Credits – Unfortunately, Clean Vehicle Credits are repealed for vehicles acquired after September 30, 2025.  Qualified taxpayers will be able to take the credit for vehicles purchased prior to October 1, 2025.
  • Charging Equipment Tax Credit – The federal Alternative Fuel Vehicle Refueling Property Tax Credit (Form 8911) for home charging equipment is still available for qualified property placed in service by June 30, 2026.
    This credit covers 30% of the cost (including hardware and installation), up to a maximum of     $1,000 for individuals.
  • Residential Clean Energy Credit (IRC § 25D) – This credit is for 30% of the cost of new, qualified clean energy property.  Eligible installations that qualify for this credit include: solar panels, solar water heaters, geothermal heat pumps, small wind turbines, battery storage technology (3 kWh or more) and fuel cells. This credit expires December 31, 2025.
  • Clean Efficient Home Improvement Energy Credit (IRC § 25D) – This credit is up to $1,200 for general improvements comprised of exterior doors, windows and skylights and other property including insulation/electrical components.  Another $2,000 credit is available for the purchase of heat pumps, water heaters and biomass stoves/boilers.  This credit also expires December 31, 2025.

Notable Items for Business/Other Activity:

  • Increased Section 179 / Bonus Depreciation – 100% bonus depreciation up to $2,500,000 for qualified property acquired after January 19, 2025
  • Qualified Business Income (QBI) / Pass-Through Deduction – The 20% QBI deduction (Section 199A) has been made permanent and is again available for tax year 2025.
  • Employer Student Loan Payment Deduction – Employers may deduct up to $5,250 annually, toward an employee’s student loans (principal + interest) under IRC § 127 educational assistance program.
  • The Research and Development (“R&D”) Credit has been enhanced for 2025 as follows:
    • Immediate Expensing – Domestic R&D expenditures can be fully deducted in the year incurred for tax years beginning January 1, 2025.  These costs do not have to be amortized.
    • Expenses for research conducted outside the U.S. must be amortized over 15 years.
    • Eligible Small businesses may retroactively expense R&D costs to years following December 31, 2021.
    • Taxpayers may expense (deduct) remaining unamortized domestic R&D costs from 2022 – 2024 entirely in 2025 or over 2 years (2025 – 2026)
    • R&D credits are available to organizations for developing/improving products, processes, software, techniques, formulas, or inventions that meet IRS requirements.  Qualifying expenses include U.S. based wages for labor, supplies and contracted expenses that are incurred for research.
    • Qualifying small businesses can elect to apply up to $500,000 of the credit annually, against payroll taxes.
  • Third-Party Transaction Reporting – The Form 1099-K reporting threshold for third party payment networks reverts to transactions exceeding $20,000 and 200 total transactions.
  • The federal estate tax exemption is $13.99 million and $15 million per individual, for 2025 and 2026, respectively.  Married couples combined federal estate tax exemption is $27.98 million and $30 million for 2025 and 2026, respectively.