Your Taxes and the One Big Beautiful Bill Act: An Overview
On July 4th, 2025, the One Big Beautiful Bill Act (OBBBA) was passed, setting the tax landscape for the next four years and beyond. As background, Congress passed the Tax Cuts and Jobs Act (TCJA) at the end of 2017 which has shaped the tax environment we’ve seen over the past eight years. Prior to passing OBBBA, much of the tax code was set to revert to pre-TCJA law after December 31st, 2025.
The general theme of OBBBA is an extension of TCJA, with numerous adjustments along the way. Below is a high-level overview of OBBBA’s impact on income taxes. Additionally, we’ve shared more in-depth insight from our tax team with further detail on provisions impacting families, business owners, and itemized/above-the-line deductions.
The One Big Beautiful Bill Act and General Changes to Individual Taxes:
- The individual tax rates from TCJA (0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37%) have been extended permanently (note that “permanent” tax changes simply mean they do not have a stated expiration date). The tax brackets reflect the same income levels of the past eight years and continue to be indexed for inflation.
- The Estate and Gift Tax Exemption has been permanently increased to $15 million per person and is indexed for inflation in future years.
- The bill increases the reporting threshold for third-party network transactions (e.g.. PayPal or Venmo) from $600 to $20,000.
- The bill permanently increases the standard deduction: $31,500 for married couples filing jointly, $23,625 for heads of household, and $15,750 for singles/married filing separately. Additional standard deductions for taxpayers over age 65 or taxpayers who are blind remain in place.
- The bill permanently removes the “Personal Exemption,” which was effectively absorbed by the higher standard deduction.
- The Clean Vehicle credit will be eliminated as of September 30, 2025.
- The Energy Efficient Home Improvement/Residential Clean Energy credits will be eliminated as of December 31, 2025.
The Bottom Line
The One Big Beautiful Bill Act is a complex piece of legislation. Truepoint’s tax specialists can help you understand how the provisions affect your personal tax situation and answer any questions you may have along the way.
