NEWS The "Big Beautiful Bill"
###Immediate Benefits for Citizens###
1. **Tax Cuts Made Permanent**:
- The 2017 Tax Cuts and Jobs Act provisions, set to expire in 2025, are made permanent, preventing a significant tax increase. This includes lower income tax rates across most brackets, benefiting a wide range of taxpayers.
- **Impact**: Middle- and working-class families could see tax reductions of approximately 15%, with estimates suggesting an increase in take-home pay of up to $13,300 annually for a typical family of four.
2. **Increased Standard Deduction**:
- The standard deduction is increased by $1,000 for individuals (to $15,750) and $2,000 for married couples (to $31,500), effective through 2028. This reduces taxable income for those who do not itemize deductions.
3. **No Tax on Tips and Overtime**:
- Up to $25,000 of tip income and $12,500 of overtime pay are deductible from federal income taxes through 2028, benefiting workers in tip-reliant industries (e.g., restaurant servers, drivers) and hourly workers with overtime. Income limits apply, phasing out for individuals earning over $150,000 or couples over $300,000.[](https
- **Note**: These deductions apply only to federal income tax, not Social Security or Medicare taxes, and the Treasury Department will define eligible professions to prevent abuse.
4.**Senior Tax Relief**:
- A new $6,000 deduction ($12,000 for couples) for seniors aged 65 and older earning up to $75,000 ($150,000 for couples), phasing out at $175,000 for individuals and $250,000 for couples. This offsets Social Security benefit taxes indirectly, as direct elimination was not feasible under reconciliation rules.
5. **Increased Child Tax Credit**:
- The child tax credit is permanently increased from $2,000 to $2,200 per qualifying child under 17, starting in 2025, with inflation adjustments from 2026. The refundable portion is also made permanent and inflation-adjusted, benefiting families with lower incomes.
6. **Trump Savings Accounts for Newborns**:
- Children born between 2025 and 2028 receive a one-time $1,000 federal deposit into a tax-advantaged savings account ("Trump account"). Parents can contribute up to $5,000 annually, and employers can add up to $2,500 (non-taxable to the recipient). Funds grow tax-deferred and can be used for education, job training, or first-home purchases after age 18.
7. **State and Local Tax (SALT) Deduction Increase**:
- The SALT deduction cap is raised from $10,000 to $40,000 for households with incomes up to $500,000, effective for five years (through 2030). This benefits middle- and upper-middle-class homeowners in high-tax states like New York and California.
8. **Auto Loan Interest Deduction**:
- Taxpayers can deduct interest on loans for U.S.-made vehicles, encouraging purchases of American-manufactured cars.
###Benefits for Businesses
1. **Permanent Extension of 2017 Tax Cuts**:
- The corporate tax rate remains at 21% (down from 35% pre-2017), and other business tax breaks from the 2017 TCJA, such as deductions for equipment and machinery, are made permanent. This provides long-term tax certainty for corporations.
2. **Full Expensing for Capital Investments**:
- Businesses can immediately deduct 100% of the cost of equipment, machinery, and factory improvements, making investments in manufacturing and production facilities more attractive. This provision is permanent and aims to boost domestic production.
3. **Research and Development (R&D) Deduction**:
- Businesses can fully deduct R&D expenses in the year incurred, encouraging innovation and investment in the U.S.
4. **Section 199A Small Business Deduction**:
- The deduction for pass-through businesses (e.g., sole proprietorships, partnerships, S corporations) is increased to 23% from 20% and made permanent. This is projected to create over 1 million small business jobs and generate $750 billion in economic growth.
5. **Opportunity Zones Extended**:
- Tax incentives for investments in disadvantaged areas (Opportunity Zones) are extended through 2033, with enhancements targeting rural communities, potentially spurring $100 billion in new investments.
6. **Increased 1099-MISC Threshold**:
- The threshold for reporting income on 1099-MISC forms is raised to $2,000, reducing paperwork burdens for small businesses and contractors.
7. **Death Tax Exemption**:
- The doubled estate tax exemption for family-owned farms and businesses is made permanent, protecting approximately 2 million small businesses and farms from high estate taxes, facilitating generational transfers.
