The One Big Beautiful Bill Act: Key Tax Provisions and Implications for Your Strategy

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, ushering in a significant update to the U.S. tax code. This legislation, enacted to extend provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and introduce new measures, aims to bolster economic growth and provide tax relief. For clients of Arnold Gruber, Ltd., Attorneys at Law, understanding these changes is critical to optimizing your tax strategy. Below, we outline the key provisions and their potential impact.

Individual Tax Provisions

• Standard Deduction: The OBBBA locks in the TCJA’s higher standard deduction permanently. Starting in 2025, it’s set at $15,750 for single filers, $23,625 for heads of household, and $31,500 for joint filers, adjusted annually for inflation.

• SALT Cap: The state and local tax (SALT) deduction cap rises from $10,000 to $40,000 for 2025–2029, with inflation adjustments. This benefit phases out for households earning over $500,000.

• Personal Exemptions: The personal exemption, previously reduced to zero, remains eliminated.

Business Tax Provisions

• Bonus Depreciation: Effective after January 19, 2025, 100% bonus depreciation is reinstated and made permanent, allowing businesses to fully expense qualifying assets upfront.

• Business Interest Expense: Starting in 2025, the deduction expands by calculating adjusted taxable income without subtracting depreciation, amortization, or depletion, boosting interest deductibility.

• Research and Development Expensing: Domestic R&D costs can be expensed immediately for tax years after 2024, while foreign R&D remains amortized over 15 years.

Implications for Your Tax Strategy

• Individuals: The higher standard deduction simplifies filing for many, while the temporary SALT cap increase aids those in high-tax states—though higher earners must plan around the phaseout.

• Businesses: Permanent bonus depreciation and enhanced interest deductions offer substantial tax savings. Consider accelerating investments or adjusting debt structures to capitalize on these rules.

• R&D-Intensive Firms: Immediate domestic R&D expensing can accelerate relief, but foreign R&D’s amortization requires strategic planning.

The OBBBA blends continuity with fresh opportunities, impacting both individual and business tax planning. Contact the attorneys at Arnold Gruber, Ltd. to tailor these provisions to your needs.