Understanding the One Big Beautiful Bill

An interactive guide to the tax law changes that make many 2017 TCJA provisions permanent and introduce new reforms.

From TCJA to OBBB: What's Changing?

The One Big Beautiful Bill (OBBB) of 2025 represents a significant legislative step to prevent the expiration of tax provisions from the Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA's changes were temporary and scheduled to revert to pre-2017 laws at the end of 2025. The OBBB not only makes many of these changes permanent but also introduces new adjustments.

This guide breaks down the key provisions, timelines, and impacts. While some changes are retroactive to the 2025 tax year, the majority will take effect in 2026, shaping the tax landscape for individuals and businesses for years to come.

Interactive Timeline of Key Changes

The OBBB rolls out changes across two main phases. Click on each item in the timeline to reveal more details about the specific provisions taking effect in that period.

2025

Retroactive Changes

Impacting 2025 Tax Returns (Filed in 2026)

  • No Tax on Tips & Overtime: Temporary relief for certain workers.
  • Increased SALT Deduction: Higher cap on state and local tax deductions.
  • Child Tax Credit: Increased credit amount.
  • Senior Deduction: An additional deduction for seniors.
  • EV Credit Ends: The Electric Vehicle Credit expires as of September 30, 2025.
  • Trump Savings Accounts: New savings vehicle established for children.

2026 & Beyond

Permanent TCJA Provisions

Making TCJA Changes Permanent

Most changes beginning in 2026 are a continuation of the 2017 TCJA laws, now made permanent.

  • Permanent Standard Deduction: The larger standard deduction is retained.
  • No Personal Exemptions: Elimination of personal and dependent exemptions continues.
  • Lower Tax Brackets: The current tax bracket structure is made permanent.
  • Mortgage Interest Limit: Deductible limit remains at $750,000.
  • Itemized Deduction Limits: Limits on casualty losses and miscellaneous deductions are kept.
  • Estate Tax Exemption: The increased exemption amount continues.

Individual Taxpayer Impact

The OBBB and ongoing inflation adjustments affect tax brackets, deductions, and credits. The charts below illustrate some of the key numerical changes for individuals for the 2025 tax year.

2025 Tax Brackets (Single Filer)

Tax brackets continue to adjust for inflation. This chart shows the income ranges for a single filer for 2025 compared to 2024.

IRA Contribution Deduction Phaseouts (2025)

Phaseout ranges for deducting IRA contributions have increased for 2025. This chart compares the new AGI thresholds for different filing statuses.

Key Deduction & Credit Updates for 2025

Earned Income Tax Credit

Max credit of $8,046 for joint filers with 3+ children (AGI up to $68,675). Max $649 for single filers with no children (AGI up to $19,104).

Alternative Minimum Tax (AMT)

Exemption rises to $88,100 for individuals and $137,000 for married couples filing jointly.

Standard Deduction

The OBBB increases the standard deduction, which will continue to be adjusted for inflation annually.

Impact on Businesses

The bill also includes significant permanent and temporary changes for businesses, primarily extending favorable provisions from the TCJA.

Restoration of 100% Bonus Depreciation

Allows businesses to immediately deduct 100% of the cost of eligible assets.

R&D Cost Expensing

Restores the ability to fully expense certain research and development costs in the year they are incurred.

EBITBA Standard for Interest

The business interest deduction calculation moves back to the more favorable EBITDA standard.

Increased Section 179 Limits

The maximum amount a business can expense for qualifying equipment is increased.

100% Expensing (Manufacturing)

A temporary provision allows 100% expensing for certain manufacturing structures.

1099-K Threshold Increase

The reporting threshold for issuing Form 1099-K is increased, reducing the burden on small sellers.

Planning Ahead for Your Taxes

TurboTax Tip: Take Action Now

With these changes on the horizon, proactive planning is essential. Don't miss opportunities to lower your current tax bill, regardless of what 2026 brings. Consider increasing contributions to your retirement plans (like a 401(k) or IRA) or participating in a Health Savings Account (HSA). These actions can provide immediate tax savings while also building your funds for the future.