What is the One Big Beautiful Bill Act?
Passed in July 2025, the One Big Beautiful Bill Act made sweeping changes to the tax code. Some provisions became permanent, while others offer short-term savings. We’ve built a guide to highlight the ones that matter most to you.
For Restaurant Employees
- No Tax on Tips Deduction – Deduct up to $25,000 of reported tips (2025–2028). First applies to 2025 returns.
- No Tax on Overtime Deduction – Deduct overtime premiums up to $12,500 (single) / $25,000 (joint) (2025–2028).
For Restaurant Owners
- FICA Tip Credit Preserved – Continues for restaurants; expanded to salons/spas in 2025 and beyond.
- Employee Retention Credit (ERC) Clean-Up – No late claims for Q3–Q4 2021 after Jan. 31, 2024; stronger IRS penalties effective July 4, 2025.
- Work Opportunity Tax Credit (WOTC) – Still available through Dec. 31, 2025; not extended by OBBBA.
- Meals & Entertainment – Meals remain 50% deductible; no return of 100% deduction.
- QBI Deduction Made Permanent – 20% deduction for pass through income stays for good.
- 100% Bonus Depreciation Extended – Immediate write-offs.
- Section 179 Expensing Expanded – Higher limits for upfront deductions on business purchases.
For Individuals & Families
- Lower Tax Rates Stay – No sunset in 2025; top rate remains 37%.
- High Standard Deduction is Permanent – Plus, an extra bump for 2025–2028.
- Personal Exemptions Remain Eliminated – No return of dependent-based exemptions.
- Child Tax Credit Increased to $2,200 – With inflation adjustments going forward.
- 20% QBI Deduction Applies to Individuals – Big help for freelancers and self-employed.
- SALT Deduction Cap Temporarily Raised – Up to $40,000 for 2025, then phased back down.
- No Tax on Tips and Overtime (Temporarily) – Partial exemption for 2025–2028.
- Mortgage Interest Deduction Limits Stay at $750,000 – No return to $1M cap.
- Home Equity Loan Interest Still Not Deductible – Unless used for home improvements.
- Extra $6,000 Deduction for Seniors (2025–2028) – Phased out at higher incomes.
- Charitable Deduction Returns for Non-Itemizers – Up to $1,000 (or $2,000 jointly).
- Expanded 529 and ABLE Account Rules – More flexibility and rollover options.
- New “Trump Accounts” for Kids – Government-funded savings for babies born 2025–2028.
- Deduction for Car Loan Interest (2025–2028) – Up to $10,000 with income limits.
Learn More
The “One Big Beautiful Bill Act” (OBBBA) is a sweeping tax and economic package that seeks to extend or make permanent many provisions of the 2017 Tax Cuts and Jobs Act, while introducing a host of new tax rules and incentives. For business owners and individual taxpayers, OBBBA proposes major changes to income tax rates, deductions, credits, and compliance requirements.
Still unsure of how to navigate The One Big Beautiful Bill Act of 2025? For more in-depth information, download our full OBBBA Resource.
We’re Here To Help You
The new rules in the One Big Beautiful Bill are full of opportunity—but also full of decisions. Choosing the right business entity, understanding new deductions, and staying on top of changing requirements can feel overwhelming without the right partner.
That’s where Abacus! comes in.
Since 1998, we’ve been helping individuals and business owners like you make confident, informed decisions that support long-term success. Our experienced team understands the unique challenges taxpayers face and knows how to keep you focused, compliant, and profitable.