On July 4, 2025, a major tax law, commonly known as the “One Big Beautiful Bill,” (OBBBA), was signed. The new legislation locks in several popular existing provisions, introduces new deductions for workers and families, and makes key updates for business owners.
We’ve prepared a quick, easy-to-follow guide to help you understand the main highlights of the bill, what’s changing and how it might affect your personal or business taxes for 2025 and beyond.
OBBBA TAX PROVISIONS FOR INDIVIDUALS
| Provision | Details |
|---|---|
| Tax rates | Tax rates enacted in 2017 via the TCJA will be permanent – 10, 12, 22, 24, 32, 35 and 37% brackets |
| Standard deduction | TCJA’s standard deduction amounts are now permanent. For tax years beginning in 2025, the standard deduction amounts are $31,500 for joint filers, $23,625 for heads of households, and $15,750 for single filers. Standard deduction amounts will be subject to inflation thereafter. |
| SALT cap | The maximum amount of state and local tax you can deduct was raised from $10,000 to $40,000 for 2025. In 2026, the cap will be $40,400 and then will increase 1% annually, through 2029. However, this new limit phases out for higher earners and will gradually return to $10,000 by 2030. |
| Personal exemption and senior deduction | Personal exemptions are permanently set at zero, but a new temporary $6,000 deduction for taxpayers age 65 and older from 2025–2028 has been added. This deduction begins to phase out at $75,000 MAGI ($150,000 for joint filers). |
| Child tax credit | Starting in 2025, the child tax credit increases to $2,200 per child and will adjust for inflation. The $1,400 refundable portion and the higher phaseout thresholds ($200,000 single / $400,000 joint) are made permanent, along with the $500 credit for non-child dependents. |
| QBI Deduction | The 20% Sec. 199A qualified business income deduction is now permanent. |
| Estate and gift tax exemption | Beginning in 2026, the estate and gift tax exemption will be permanently increased to $15 million per individual ($30 million for married, filing jointly couples), with future adjustments for inflation. |
| Itemized deductions limitations | The limitation on itemized deductions for taxpayers in the 37 percent income tax bracket has returned, effective after 2025. |
| No income tax on tips | Workers who receive tips can deduct up to $25,000 in tip income from their taxes—no itemizing required. The deduction is allowed for both W-2 and Form 1099-NEC workers. It begins to phase out when the taxpayer’s MAGI exceeds $150,000 ($300,000 for joint returns). This deduction is available for tax years 2025 through 2028. |
| No income tax on overtime | A temporary deduction of up to $12,500 ($25,000 in the case of a joint return) for qualified overtime compensation received by an individual during a given tax year was enacted. This deduction is available for tax years 2025 through 2028. |
| Automobile loan interest | A deduction of up to $10,000 for interest paid on an automobile loan in 2025 through 2028 for a car purchased after 2024. This is available for itemizers and non-itemizers. |
| Dependent care assistance programs | The annual tax-free limit for employer-provided dependent care assistance increased from $5,000 to $7,500. |
| Trump accounts | Provisions for the creation of tax-favored accounts for newborn children, called “Trump Accounts.” Accounts opened for a child born between January 1, 2025 and December 31, 2028, are seeded with a $1,000 contribution from the government. Accounts grow and are managed similar to an IRA. |
| Sec 529 plans | Usage of 529 savings plans is expanded and will now allow tax-free withdrawals for enrollment or attendance at elementary or secondary schools, as well as new categories of higher education expenses, including credentialing programs. |
OBBBA TAX PROVISIONS FOR BUSINESSES
| Provision | Details |
|---|---|
| Bonus depreciation | 100% bonus depreciation permanent for qualifying assets and/or properties and certain plants acquired or placed in service on or after January 19, 2025. |
| Sec. 179 expensing | The Sec. 179 expensing limit was increased $2.5 million, with a phaseout starting when total qualifying property exceeds $4 million. |
| Research and development expenses | Immediate deductions for U.S.-based research and development costs starting in 2025, while foreign R&D expenses must still be amortized over 15 years. Small businesses with under $31 million in average annual receipts can apply this change retroactively to 2022. All taxpayers can choose to accelerate deductions for qualifying R&D costs incurred from 2022 to 2024 over a one or two year period. |
| Limitation on business interest | EBITDA-based limitation under Section 163(j) for tax years starting after December 31, 2024 is restored. For those years, adjusted taxable income used to calculate the interest deduction limit will exclude deductions for depreciation, amortization, and depletion. |
| Form 1099 reporting threshold | The reporting threshold increased for specific payments made to individuals conducting a trade or business, as well as for payments for services, from $600 to $2,000 per calendar year. Starting in 2027, this threshold will be adjusted annually to account for inflation. |
OBBBA TAX PROVISIONS INTERNATIONAL PROVISIONS
| Provision | Details |
|---|---|
| GILTI and FDII | For tax years beginning after December 31, 2025, the bill reduces the Section 250 deduction to 33.34% for foreign-derived intangible income (FDII) and 40% for global intangible low-taxed income (GILTI), effectively setting the tax rate at 14% for both. It also updates the definition of deduction-eligible income for calculating FDII and removes the use of a corporation’s deemed tangible income return in determining both FDII and GILTI. As part of these revisions, the bill renames FDII as “foreign-derived deduction eligible income” and GILTI as “net CFC tested income.” |
How the One Big Beautiful Bill Act Impacts You:
- If you’re an employee, you may save more on taxes thanks to deductions for tips, overtime, and automobile loan interest.
- If you’re a parent or planning for a family, the expanded child tax credit and new Trump Accounts can provide more support.
- If you’re a high-income earner, keep an eye on phased-out deductions and changes like the SALT cap.
- If you’re a business owner, many deductions and credits you rely on are now permanent, which helps with planning and future investments.
Florida Business Tax Changes: Commercial Rent Tax Elimination (HB 7031)
While not part of the federal “OBBBA” legislation, Florida businesses should be aware of HB 7031, which was signed into law by Governor DeSantis on June 30, 2025.
Effective October 1, 2025, Florida will eliminate the 2% state sales tax on commercial rent payments for properties such as office, retail, warehouse, and storage space. This change continues the state’s ongoing effort to reduce the commercial rent tax and removes the local discretionary surtax imposed by many counties.
Key Takeaways for Florida Businesses Regarding HB 7031
- Significant Savings: Businesses renting commercial property in Florida will no longer pay the 2% state sales tax and any local surtaxes on rent payments, effective October 1, 2025.
- Broader Impact: HB 7031 applies to office, retail, warehouse, and storage spaces, reducing occupancy costs across various industries.
- Historical Context: Florida was previously the only state to impose a sales tax on commercial leases, making this repeal a major shift.
- Action Required: Businesses should update their billing and payment processes and review new lease agreements to reflect this change.
Have Questions?
We’re here to help you make sense of what this means for your specific situation. Whether it’s maximizing deductions, adjusting your estimated payments, or planning for your business—we’ve got you covered.
If you have any questions about how these changes may impact you or your business, contact us for assistance.