Trump’s One Big Beautiful Act: Sweeping Tax Reform
- jonathanlgerber
- Jul 8, 2025
- 2 min read
On the 250th Birthday of the United States of America, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), a sweeping Federal tax reform package, including numerous provisions affecting individuals, estates, and businesses.
Provision | Effective | Impact |
Child & Dependent Care Exclusion | 2026 and beyond | Expanded to $7,500. |
SALT Deduction Cap Increase | 2025–2029 | Cap raised to $40K, expires by 2030. Subject to AGI limits. |
Interest on Auto Loans | 2025- 2028 | New deduction for interest on personal auto loans even for non-itemizers. Subject to AGI and other limitations. |
Charitable Contributions (Itemizers and Non-Itemizers) | 2026 and beyond | Itemizers: Only contributions exceeding 0.5% of AGI are deductible. |
Credit for Children (CTC) | 2025 and beyond | Makes permanent ACT and ACTC thresholds and amounts and increases the child tax credit to $2,200. |
Credit for Contributions to Scholarship Granting Organizations | 2027 and beyond | 100% nonrefundable tax credit up to $1,700 per taxpayer for contributions to certified SGOs. |
Trump Accounts for Babies | 2025- 2028 | Creates tax-free savings accounts for newborns with federal $1,000 seed contributions. |
Business & Investment Tax Planning Highlights
Provision | Effective | Impact |
100% Bonus Depreciation | 2025 and beyond | 100% bonus depreciation made permanent for qualified property placed in service after January 19, 2025. |
R&D Expensing | Effective for small businesses beginning in 2024 and for large businesses beginning in 2025, with retroactive application to 2022. | Full expensing restored for domestic research. Foreign R&D still amortized over 15 years. |
1099-NEC Reporting | 2026 and beyond | Increased threshold from $600 to $2,000. |
1099-K Reporting | 2025 and beyond | Restores threshold to $20,000/200 transactions. |
163(j) Interest Expense Limitation | 2025 and beyond | Calculation now allows depreciation, amortization, and depletion to be added back to adjusted taxable income—expanding deductible interest for |
This information should not be relied upon as it may contain important errors or emissions. Do not make any tax or financial decisions without obtaining professional advice from your advisers.
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