Summary of Key Provisions of the One Big Beautiful Bill

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill (referred to here in as the “BBB”). The purpose of this summary is to highlight some key provisions that will have an impact on wealth planning. For those who want a more in-depth analysis on planning techniques that will be enhanced by the bill or how provisions of the bill might impact their personal wealth plan, Johnson Financial Group will record a deeper-dive video focused on implications of the bill on wealth planning. Further, we encourage you to contact your wealth advisor with any questions and to review their own personal planning implications. 

Provisions Impacting Individual Tax Planning

• Permanent TCJA Tax Rates: The BBB locks in the 2017 Tax Cuts and Jobs Act (“TJCA”) rates, eliminating the possibility that its provisions can “sunset” (or expire without Congressional action). 
• Standard Deduction Increase: The standard deduction is increased to $15,750 (single), $23,625 (head of household), and $31,500 (married filing jointly), with annual inflation adjustments. 
• Expanded SALT Deduction: The state and local tax deduction cap, which was $10,000 under the TJCA, is increased to $40,000 through 2029. During those years, the deduction is reduced (down to $10,000) for taxpayers with $500,000 of modified adjusting gross income (“MAGI”). 
• Overtime Income Deduction: Up to $12,500 of overtime pay is deductible through 2028. The deduction phases out for MAGI more than $150,000 ($300,000 for joint filers). 
• Tip Income Deduction: Workers in tip-based industries can deduct up to $25,000 in tips through 2028. This deduction also phases out above $150,000/300,000 of MAGI. 
• Auto Loan Interest Deduction: Interest on loans for U.S.-assembled vehicles is deductible up to $10,000/year (2025–2028), phasing out above $100,000 MAGI ($200,000 joint). 
• Trump Accounts: The BBB creates a new tax deferred savings account known as a “Trump Account.” A Trump Account receives a $1,000 government deposit for eligible newborns (2025–2029). Others can make annual contributions of up to $5000 (collectively per beneficiary) to a Trump Accounts. Trump Accounts have tax rules similar to a traditional IRA. 
• Child & Dependent Care Credit: The BBB permanently increases the credit rate from 35% to 50% of qualifying expenses. The credit percentage phases down gradually for adjusted gross income (“AGI”) in excess of $15,000, with a floor of 20%. 
• Dependent Care Assistance: The annual exclusion under Sec. 129 is increased from $5,000 to $7,500. 

Provisions Impacting Seniors & Social Security 

• Senior Bonus Deduction: The BBB creates a $6,000 deduction for individuals aged 65+ with income up to $75,000 ($150,000 for couples), with a phase out at higher levels of income. 
• Social Security Tax Relief: The BBB eliminates income tax on Social Security benefits for nearly 90% of recipients. 

Provisions Impacting the Estate Tax

• Lifetime Exemption: The TJCA doubled the value of property that could be transferred to a non-spouse free of gift or estate tax (that amount is known as the lifetime exemption). That relief was scheduled to expire at the end of 2025. The BBB both increased the lifetime exemption to $15 million per person starting in 2026 (indexed for inflation) and made the relief permanent. The BBB also increased the generation skipping tax exemption to that same $15 million (indexed) amount. Provisions impacting Businesses and Investors 
• Bonus Depreciation: Allows for immediate expensing of qualifying property placed in service after Jan 19, 2025. 
• Sec. 179 Expensing: Increases the limit to $2.5 million, with phaseout beginning at $4 million in total property cost. 
• QBI Deduction: Increases the current 20% qualified business income deduction to 23% and makes the deduction permanent. This will have a material positive impact on small business owners. 
• Opportunity Zones: The benefits of Opportunity Zones investments to reduce capital gain income were extended beyond 2025. 
• Qualified Small Business Stock (QSBS): Increased the exclusion on gain from the sale of qualified business stock to 75% if held for at least four years and 100% if held for more than five years.