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Welcome to our OBBB Information Hub, where you’ll find all articles in our OBBB series conveniently linked for easy access.
The One Big Beautiful Bill Act (OBBB) introduces significant tax changes for 2025 through 2028, including new deductions for qualified cash tips and overtime compensation. These provisions create opportunities for both employees and employers—but they also raise important questions about eligibility, calculation methods, and compliance.
Browse the full series below and get practical guidance for making the most of these new tax-saving opportunities.
Introduction to the One Big Beautiful Bill
Permanent QBI Deduction
The Qualified Business Income (QBI) deduction, established under Section 199A of the Internal Revenue Code, has been a valuable tax benefit for many small business owners since its introduction in the Tax Cuts and Jobs Act of 2017. This deduction allows eligible taxpayers—primarily those operating pass-through entities such as sole proprietorships, partnerships, S corporations, and certain trusts—to deduct up to 20% of their qualified business income from taxable income.
Increased SALT Deduction Cap
The state and local tax (SALT) deduction has long been a critical element of the U.S. tax code for individuals who itemize their deductions, especially homeowners in high-tax states.As part of the Tax Cuts and Jobs Act of 2017, the SALT deduction cap limited the amount of state and local taxes, such as property, income, and sales taxes—that taxpayers could deduct on their federal returns to $10,000 annually ($5,000 for married individuals filing separately). This restriction significantly impacted taxpayers in states with higher tax burdens, reducing the federal tax benefit for many homeowners.
Bonus Depreciation
Bonus depreciation has long been a valuable tool for businesses looking to invest in new equipment, machinery, and other assets. The One Big Beautiful Bill (Public Law 119-21), signed in 2025, restored 100% bonus depreciation for qualified property acquired after January 19, 2025, effectively reversing the phase-down schedule that began in 2023. It also expands accelerated treatment to certain manufacturing and production facilities. Together, these provisions offer small business owners significant opportunities to reduce taxable income while upgrading or expanding their operations.
Child Tax Credit
The Child Tax Credit (CTC) has long been a cornerstone of tax relief for families, helping to offset the costs of raising children. The OBBB permanently raises the CTC to $2,200 per qualifying child for the 2025 tax year (with future annual inflation adjustments), and ensures the refundable portion—the Additional Child Tax Credit (ACTC)—is indexed for inflation (estimated at $1,700 in 2025). These enhancements provide meaningful financial support for families, particularly those with moderate to low incomes.
Tips & Overtime Pay
The OBBB introduces two temporary above-the-line deductions, designed to provide targeted tax relief for workers in industries where tips and overtime are common, such as hospitality, healthcare, retail, and construction. These deductions apply for tax years 2025 through 2028 and allow taxpayers to reduce their adjusted gross income (AGI), whether they itemize or take the standard deduction. Eligible taxpayers may deduct up to $25,000 in tips and up to $12,500 in overtime pay ($25,000 for joint filers) per year.
Senior Bonus Deduction
The OBBB introduces a new temporary above-the-line deduction for seniors which was advertised as a way not to tax Social Security Benefits Available for tax years 2025 through 2028, the Senior Bonus Deduction allows eligible taxpayers to deduct up to $6,000 from their adjusted gross income (AGI). A married couple would be eligible for up to a $12,000 deduction. This deduction provides meaningful tax relief, though it is phased out for higher-income earners.
Estate and Gift Tax Exemption
The OBBB permanently increases the federal estate and gift tax exemption to $15 million per person, effective for 2026 and beyond. This significant change expands opportunities for wealth transfer and provides greater flexibility to pass assets to heirs or beneficiaries with reduced tax consequences.
Trump Accounts
The OBBBA introduces Trump Accounts, a tax-advantaged savings program available beginning July 4, 2026. These accounts provide families with a tool to build long-term savings for their children, offering a one-time $1,000 government contribution for children born between January 1, 2025, and December 31, 2028. Trump Accounts feature tax-deferred growth, contribution opportunities from family and employers, and favorable tax treatment for qualified withdrawals.
The One Big Beautiful Bill Act (OBBBA) brings sweeping tax changes that affect tips, overtime compensation, and compliance requirements for both individuals and businesses. Staying informed is key to maximizing deductions and avoiding costly mistakes.
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