Yushield – Financial Safety Starts Here

The One Big Beautiful Bill Act (OBBB/OBBBA), signed into law by President Trump on July 4, 2025, introduces significant changes to the U.S. tax code, impacting individuals, businesses, and specific industries. Below is a detailed analysis of its key tax provisions and their implications, based on available information.

🧾 Individual Taxpayer Highlights

• Permanent extension of TCJA tax cuts: Retains 2017 income tax brackets (10–37%) and elevated standard deduction ($15,750 single, $31,500 MFJ [Married Filling Jointly]), indexed for inflation (TCJX: Tax Cuts and Jobs Act).
• Increased SALT deduction cap: Cap raised from $10,000 to $40,000 (joint filers under $500K AGI), phasing back down for higher earners; reverts to $10,000 after 2029 (SALT: State and Local Tax).
• Expanded senior deduction: Seniors (65+) get an extra $6,000 deduction on top of the standard amount (joint: $12,000), phased out above certain incomes; expires 2028.
• Tax breaks for tipped/overtime income: Up to $25K (combined) in deductions on tip & overtime earnings for workers earning < $150K; retroactive for 2025; sunsets 2028.
• Child Tax Credit increase: Raised from $2,000 to $2,200 per child, fully refundable up to $1,400, with inflation adjustments; eligibility now requires work-authorized SSNs; may exclude ~4.5M children.
• No federal tax on car-loan interest: Deduction (up to $10K/year) for interest on U.S.-assembled vehicles bought 2025–2028.

🏭 Business / Small Business Benefits

• 20% pass‑through income deduction (Sec 199A): Permanently extended; phase-out thresholds increased from $50K/$100K to $75K/$150K.
• 100% bonus depreciation: Fully deductible for qualifying assets placed in service post-Jan 19, 2025; now permanent.
• Expanded Section 179 expensing: Increased from $1M → $2.5M, with phase-out at $4M.
• Full expensing for domestic R&D: Reinstated permanent immediate write-off for U.S.-based R&D.
• Disallowed business loss limitation: Permanent excess business loss cap, inflation-adjusted ($313K for 2025).

🏦 Other Tax and Credit Changes

• Estate & gift tax exemption: Permanently set at ~$15M per person ($30M joint), inflation-adjusted.
• Trump Accounts: New tax-deferred child accounts: $1,000 deposit at birth + $5,000 annual contributions (2025–2028).
• Remittance tax: 1% excise on cross-border remittances (post-2025).
• Private school voucher credit: Dollar-for-dollar federal tax credit with no cap for donations supporting K‑12 private school vouchers.
• Clean energy credit repeal: Phases out EV and solar incentives, ending most IRA credits by 2026; some home efficiency credits through 2025.

📉 Fiscal and Distributional Impact

• Costly to deficits: Adds $3–4 trillion to national debt over 10 years (CBO: +$2.8 T by 2034); analysis shows reduced tax revenue ($4.5 T) and higher debt-to-GDP. 
• Regressive shift: Working-class and lower-income households lose more in health & benefit cuts than they gain in tax breaks, while high earners reap majority of benefits.

✅ What To Do Now

• Revisit 2025 withholdings: With tip/overtime break, seniors and some credits retroactive, your refunds/withholding may change.
• Plan capital purchases: Consider accelerating investments to utilize Section 179, bonus depreciation, and expensing.
• Review eligibility: Especially child tax credit SSN requirements, senior deductions, and SALT cap phase‑outs.
• Monitor state participation: Not all states will allow private school credit donations—check your locality.

For additional information, please also see the article titled “7 Things Taxpayers Need To Know About the Big Beautiful Bill Act”, published on Investopedia, July 9, 2025.

Limitations and Notes:
OBBB extends key Trump-era tax cuts permanently, adds targeted breaks for seniors, tipped workers, families, and small business owners – but disproportionately benefits higher earners, increases debt substantially, and phases out clean energy incentives.

For detailed planning, taxpayers should consult with tax professionals, as many provisions are effective January 1, 2025, and require strategic adjustments.