/>iOverview
On July 4, 2025, President Donald Trump signed into law legislation (H.R. 1), known as the “One Big Beautiful Bill Act” (the Act). The signing concluded the bill’s legislative journey through Congress, where it underwent extensive debate and negotiation, along with numerous revisions, both in the House of Representatives and subsequently in the Senate. Ultimately, the version the Senate adopted on July 1 was approved by the House without further changes, landing on Trump’s desk by the July 4 deadline. The Act passed both chambers by slim margins, with Vice President J.D. Vance casting the deciding vote in the Senate, and without Democratic support.
The Act broadly reflects the Trump administration’s tax and other priorities. It extends and makes permanent, with modifications in some cases, an assortment of tax law provisions enacted during Trump’s first term, as part of the Tax Cuts and Jobs Act of 2017 (the TCJA), that would otherwise have sunset after 2025. In general, in addition to other law changes, the Act extends expiring tax cuts enacted temporarily in the TCJA and may increase federal budget deficits compared to projections without the Act.
Perhaps most notably, the Act locks in the current tax rates and brackets for individual/non-corporate taxpayers, including a maximum rate of 37% on ordinary income that would otherwise have reset to 39.6% in 2026. Another feature relates to the deductibility of state and local taxes (SALT) by individuals. The pre-existing annual deduction limitation of $10,000 for married taxpayers filing joint returns, which was enacted in the TCJA, would have expired after 2025. The Act extends the limitation permanently, but with a reprieve in the form of a higher cap ($40,000 on joint returns, with certain adjustments and an income-based phase-out) for a five-year period through 2029.
The Act also extends and modifies an array of business tax provisions highlighted below. Further, it makes noteworthy tax changes in the areas of international tax, not-for-profit organizations, estate and gift taxes, and tax credits and incentives, including an extension and expansion of opportunity zones, as well as a roll-back of numerous clean energy initiatives enacted during the Biden administration. While the tax title accounts for much of the Act, and this GT Advisory is focused on tax law, the Act includes other consequential items, including provisions relating to national defense, border enforcement, Medicaid funding and eligibility rules, and education policies, among other things, and an increase in the U.S. government’s authorized debt limit by $5 trillion.
