On July 4, 2025, the President signed domestic spending and tax reform package referred to as the One Big Beautiful Bill Act. The Act represents the most significant update to the federal tax code since the Tax Cuts and Jobs Act of 2017 (TCJA).

The tax reform makes permanent many of the individual and business tax provisions passed in 2017 that were set to expire at the end of 2025. The legislation also introduces new, targeted tax breaks for seniors, workers and domestic business investment.

Certain tax provisions are effective January 1, 2025, while other items take effect in 2026.

Below are the major items in the 2025 tax reform.

Business tax provisions:

  • QBI deduction made permanent
  • 100% bonus depreciation extended
  • Increase in Section 179 property expensing
  • Qualified production property deductions
  • Full local R&D expensing
  • Interest deduction relief
  • Excess Business Loss (EBL) limitation

International tax provisions:

  • FDII deduction is 33.34%, elimination of QBI adjustment
  • GILTI deduction is 40%, increase in FTC to 90%
  • BEAT rate is 10.5% (11.5% for certain banks)

Individual tax provisions:

  • SALT cap increased to $ 40 K
  • Additional $6,000 deduction for seniors
  • Permanent elimination of miscellaneous itemized deductions, personal exemption, etc.
  • Itemized deduction limit for high income earners
  • Estate and gift tax exemption is made permanent
  • Deduction for tips and overtime pay
  • Car loan interest deduction