July 2025
On July 4th, President Trump signed the “One Big Beautiful Bill Act,” which includes a broad range of tax reform provisions. The provisions listed in the bill will impact both individuals and small businesses.
For Individuals:
- A deduction for overtime and tips: The bill gives eligible workers a temporary deduction for overtime income up to $12,500 and tip income up to $25,000 until 2028.
- SALT Deduction: The deduction limit for State and local taxes (SALT) is temporarily increased from $10,000 to $40,000 for individuals earning less than $500,000. The change in the deduction limit will stay in effect until 2029, after which the limit returns to $10,000.
- Permanently increasing the Child Tax Credit for more than 40 million families.
- Tax deduction on auto loan interest paid on vehicles assembled in the United States: A portion of your car interest is deducted from your taxable income if you own a vehicle made in the United States.
- Tax Cuts and Jobs Act (TCJA) brackets are staying the same and an increased standard deduction: The legislation will keep the increased TCJA brackets and the higher standard deduction.
- Single filers – The standard deduction will increase from $15,000 to $15,750.
- Married filing jointly – The standard deduction will increase from $30,000 to $31,500.
- Heads of household – The standard deduction will increase from $22,500 to $23,625.
- Temporary expansion of senior tax (social security) deductions: For tax years 2025 through 2028, taxpayers aged 65 and older will receive an additional $6,000 deduction. This is available for both individuals who itemize and those who take the standard deduction, and phases out for higher earners, primarily those with incomes above $75,000 (single filers), or $150,000 (married filing jointly).[i]
- Increased estate tax exemption: The bill provides permanent enhanced death tax relief by increasing the estate tax exemption to $15 million per individual and $30 million per couple, beginning in 2026.[ii]
- Eligible family farms can be safeguarded from punitive double taxation: Family farmers and ranchers may benefit from a permanent small business deduction increase, immediate expensing, and more flexibility to secure farming loans at lower costs.[iii]
- Trump accounts for new babies: The introduction of a new savings vehicle is the “Trump accounts,” an incentive program that includes a $1,000 government-provided baby bonus for children born in the next four years. The accounts also permit taxpayer contributions up to $5,000 annually that will be able to grow tax-free until the beneficiary turns 18. The account will then transition into a traditional individual retirement account (IRA).[iv]
- Credits for electric vehicles (EV) and residential energy products repealed: Various tax credits related to EVs and residential energy products are either being repealed or curtailed at some level.
For Business Owners:
- Permanent Small Business Deduction (Section 199A): A permanent 20% deduction for qualified business income (QBI) for pass-through entities. The deduction helps to lower the tax rate for these businesses, the most common business entity in the United States.[v]
- Modification of the Business Interest Deduction: The adjusted taxable income used in calculating the business interest deduction has been revised, making it more favorable for small businesses.[vi]
- Bonus Depreciation: One hundred percent bonus depreciation has been permanently reinstated, allowing businesses to deduct the full cost of eligible qualified property in the first year.[vii]
- Section 179 Expensing Cap Increase: The limit that allows businesses to immediately deduct the cost of equipment has been increased to $2.5 million.
- Tax Credit for Organizations that Offer Scholarships: A new tax credit option for donations to organizations that grant scholarships.[viii]
- Retroactive Deductibility of Domestic Research and Development (R&D) Expenses: Small businesses with average annual gross receipts of $31 million or less can retroactively deduct domestic R&D expenses incurred after Dec. 31, 2021.
- Uncertain impacts to the broader economy, including lending rates, healthcare costs, and changing tax code, have the potential to affect small businesses.
Schedule a meeting with your financial professional
With all the changes reportedly taking form after the signing of Trump’s “One Big Beautiful Bill,” you may consider scheduling a meeting with your financial professional to learn about how these modifications could impact you and your financial strategy and goals.
Investment advice offered through HighPoint Advisor Group, LLC, a registered investment advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Although general strategies and / or opinions are revealed, this post is not intended to, nor does it represent or reflect, transactions or activity specific to any one account. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All data and information are gathered from sources believed to be reliable and is not warranted to be correct, complete, or accurate.
Investments carry the risk of loss including loss of principal. Past performance is never a guarantee of future results. Vantage Financial Partners Limited is not a tax advisor. Please consult a tax professional for any specific questions regarding your tax situation.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
[i] One Big Beautiful Bill Implements Significant Tax Package | Center for Agricultural Law and Taxation
[ii] Big GOP Tax Bill Could Change Your Estate Planning for 2025 | Kiplinger
[iii] American Farmers Benefit from The One, Big, Beautiful Bill – Ways and Means
[iv] One Big Beautiful Bill: Pros & Cons: The Good, Bad, and the Ugly
[v] Tax Bill Will Deliver Permanent Relief for Small Businesses | U.S. Chamber of Commerce
[vi] One Big Beautiful Bill Explained: Stinson LLP Law Firm
[vii] The One, Big, Beautiful Bill – The White House
[viii] President Trump’s One Big Beautiful Bill: A Win for Workers, Farmers, and America’s Future – The White House