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The Opportunity for Better Business and Budget Accountability Act (OBBBA or One Big Beautiful Bill Act) is making headlines as it brings sweeping tax changes set to take effect in 2025. Designed to modernize the U.S. tax system, OBBBA brings a wave of new tax provisions that impact both individuals and small business owners. Whether you’re preparing for the next filing season or looking to stay ahead of the curve, understanding these updates is crucial for effective tax planning and financial success. In this article, we’ll break down the key tax changes from OBBBA 2025, what’s changing, who it affects, and how to stay ahead.

1. Individual Tax Changes

• Permanent 2017-era tax rates: The seven-tier bracket structure (10%–37%) now carries forward indefinitely past 2025.
• Enhanced standard deduction: Raises amounts to $15,750 (single), $23,625 (HoH), and $31,500 (MFJ), with annual inflation adjustments.
• Child Tax Credit (CTC): Increased to $2,200 per child (up from $2,000), indexed to inflation starting 2026.
• Senior deduction: New $6,000 above-the-line deduction for those ≥ 65, phasing out above certain income thresholds.
• Charitable donations simplified: Starting 2026, non‑itemizers may deduct up to $1,000 (single) or $2,000 (joint) in charitable gifts.
• Car loan interest deduction: Temporary above-the-line deduction of up to $10,000 for interest on loans for U.S.-assembled cars bought between 2025–2028 (phase‑out over >$100k/$200k MAGI).
• Tip & overtime deductions: Workers earning < $150k can deduct up to $25,000 in tips and $12,500 in OT ($25,000 married) – temporary through 2028.

2. SALT Deduction Cap Adjustment

• Temporary SALT cap increase: Limit raised to $40,000 through 2029 (phasing for high earners), reverting to $10,000 in 2030.
• Note for small-business owners: Pass-through entity state‑tax payments still bypass the SALT cap via entity-level payments.

3. Small Business & Pass-Through Tax Benefits

• Section 199A pass-through deduction: Continues at 20% with higher phase-out thresholds ($75k single / $150k joint) .
• Business interest & depreciation:
  • Business interest deduction limit now based on EBITDA rather than EBIT, permanently capped at 30% of adjusted income.
  • Full 100% bonus depreciation reinstated for qualified property from 2025 onward.
  • Immediate write-off allowed for domestic R&D expenditures, including retroactive relief.

4. QSBS (Qualified Small Business Stock) Enhancements

• Expanded gain exemption: Gross asset cap increased to $75M (index‑adjusted); per‑issuer gain exclusion raised to $15M.
• Tiered holding periods: 50% exclusion after 3 years, 75% after 4, and full 100% after 5 years.
• Effective date: Applies to QSBS issued after July 4, 2025.

5. Estate & Trust Planning Updates

• Estate/gift/GST tax exemption: Permanently raised to $15M (individual) / $30M (couple), indexed for inflation.
• “Trump Accounts” for children: Automatic $1,000 deposit at birth (Dec 2025–2028), with parent contributions up to $5,000 annually.

✅ Bottom Line

• Individuals & families benefit from simplified tax filing via higher standard deductions and non-itemizer charitable deductions, while families gain a modest CTC boost.
• Seniors may see enhanced deductions reducing taxable income—even Social Security tax exposure—through 2028.
• Small businesses & pass-through entities enjoy stronger deductions for business interest, R&D, depreciation, and continued 199A benefits.
• Entrepreneurs & investors gain a significant boost with QSBS rules allowing earlier and larger tax-free exits.
• Estate & wealth planning is eased with elevated gift/estate exemptions and tax-deferred “Trump accounts.”

The BBB Act offers a blend of permanent individual tax relief, enhanced small-business benefits, and new incentives for investment and wealth transfer. While these changes are favorable, they come with sunset provisions for car interest, tips, senior deductions, and passes through to 2028–2029. Careful tax planning—especially for high earners and business owners—will be essential to fully leverage the bill’s benefits and comply with evolving thresholds.

For personalized planning assistance, please reach out to Askew CPA Services (713) 352-0831 or Contact Us page (Contact | Askew CPA Consulting Firm, LLC) to send a message or schedule a consultation.