What the “One Big Beautiful Bill” Means for CPA Firms

Key Tax Planning Changes — With Dollar Amounts and Action Items

Congress officially passed the One Big Beautiful Bill (OBBB) on June 30, 2025. It's the most significant tax update since the 2017 Tax Cuts and Jobs Act (TCJA), which locks in major provisions, introduces new deductions, and offers critical planning opportunities for both individuals and businesses.

Below is your firm’s action-oriented breakdown — complete with thresholds, dollar values, and next steps to prepare for a smoother 2025 tax season.

Individual & Family Tax Changes

TCJA Rates & Standard Deduction Made Permanent

2025 Standard Deduction:
$15,750 – Single
$23,625 – Head of Household
$31,500 – Married Filing Jointly

Action Items:
• Update client tax projections and templates
• Confirm new deduction amounts in tax prep software

SALT Cap Increased Through 2029

New Cap: $40,000 (indexed annually; previously $10,000)

Action Items:
• Revisit SALT vs. standard deduction strategies for high-income clients
• Run PTET calculations for business owners in high-tax states

Expanded Child Tax Credit

$2,200 per qualifying child (indexed for inflation)
$1,400 refundable portion permanently retained
Phaseouts: $200,000 (Single) / $400,000 (Married Filing Jointly)

Action Items:
• Identify eligible clients and optimize credit usage
• Ensure correct withholding and advance payments if applicable

QBI Deduction Locked In

20% deduction on qualified business income
Phase-in thresholds:
$75,000 – Single
$150,000 – Married Filing Jointly
New $400 minimum deduction if the client has $1,000+ in QBI from active participation

Action Items:
• Review QBI for clients with modest business income
• Check phaseout limits for SSTBs (Specified Service Trades or Businesses)

New Worker-Based Deductions (2025–2028)

No Tax on Tips
Deduct up to $25,000 of reported tips (W-2 or 1099)
Phaseouts start at $150,000 (Single) / $300,000 (Married Filing Jointly)

No Tax on Overtime Pay
Deduct up to $12,500 (Single) / $25,000 (Married Filing Jointly)
Same phaseout: $150,000 / $300,000 MAGI

Car Loan Interest Deduction
Deduct up to $10,000 per year on interest for personal-use U.S.-assembled vehicles
Phaseouts: $100,000 (Single) / $200,000 (Married Filing Jointly)

Action Items:
• Add questions about tips, OT, and auto loan interest to client intake forms
• Verify eligibility based on income thresholds
• Ensure W-2s and 1099s reflect income separately for tracking

Seniors & Homeowners

$6,000 Senior Deduction (65+, phases out above $75,000 MAGI)
Mortgage interest deduction on up to $750,000 in home debt made permanent
Expanded disaster loss deduction includes state-declared disasters

Action Items:
• Identify clients turning 65 before December 31, 2025
• Review disaster loss eligibility for recent events

More Family Relief

Child & Dependent Care Credit: 50% of qualified expenses
Dependent Care Assistance Exclusion increased from $5,000 to $7,500
Adoption Credit: Up to $5,000 now refundable

Charitable Deduction for Non-Itemizers:
$1,000 – Single
$2,000 – Married Filing Jointly

Action Items:
• Update planning for dual-income families using dependent care
• Advise non-itemizers on maximizing above-the-line charitable deductions

Trump Accounts for Kids

Tax-free savings accounts for children under 18
Annual contribution limit: $5,000
$1,000 bonus credit for babies born between 2025–2028 when an account is opened

Action Items:
• Educate young families about Trump Accounts vs. 529s
• Include in long-term estate and education planning

Key Business Provisions

Bonus Depreciation

Returns to 100% for qualifying property placed in service after January 19, 2025

Section 179 Expensing

New cap: $2.5 million
Phaseout begins at $4 million

Action Items:
• Adjust depreciation planning for late 2025 asset purchases
• Reevaluate capital investment strategies

R&D Deduction

Domestic R&D expenses fully deductible
Small firms (<$31M gross receipts) may apply retroactively to 2022

Action Items:
• Identify eligible businesses for amended returns
• Adjust 2025 estimates to reflect full deductions

Business Interest Deduction (Section 163(j))

EBITDA-based limitation reinstated (depreciation/amortization excluded)

Action Items:
• Recalculate deductibility for clients with high-interest expenses
• Coordinate with lenders if necessary

Employer-Provided Childcare Credit

Increased from 25% to 40%
Caps:
$500,000 – General businesses
$600,000 – Eligible small businesses

Action Items:
• Discuss with clients offering childcare or planning to
• Explore partnerships with licensed providers

Ending or Reverting Soon

• Clean energy credits begin phasing out after December 31, 2025
• The ERC claims deadline was January 31, 2024
• Form 1099-K threshold returns to $20,000 and 200 transactions

Action Items:
• Flag 2025 installations for final clean energy credits
• Prepare gig workers for increased 1099-K reporting

International & Corporate Tax Changes

• GILTI/FDII renamed with new rules (pending IRS guidance)
• BEAT tax rate increased to 10.5%

Qualified Small Business Stock (QSBS) gain exclusion raised:
75% for stock held 4+ years
100% for stock held 5+ years

New Installment Sale Option for farmland sold to qualified buyers

Action Items:
• Identify clients with startup stock for QSBS planning
• Consult international tax experts on updated strategies
• Flag farmland sales for installment tax deferral

CPA Firm Action Checklist

Here’s your ready-to-go punch list:

• Update tax software with new thresholds and deductions
• Add new deduction categories to client organizers (tips, OT, car loan interest)
• Refresh engagement letters and scopes to reflect new reporting
• Train staff on Trump Accounts, child tax updates, and income phaseouts
• Communicate changes via client newsletter or webinar
• Review clients for amended returns or catch-up opportunities (R&D, SALT, QSBS)