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moreDear Sir/ Madam,
Please find our Newsflashes providing brief overview of the major tax provisions introduced under the “One Big Beautiful Bill Act”, passed by the House of Representatives on 22 May 2025.
a) Key USA Update - Corporate Tax Provisions – One Big Beautiful Bill Act (2025)
b) Key USA Update - Personal Tax Provisions – One Big Beautiful Bill Act (2025)
This legislation aims to extend and expand upon the reforms initiated under the Tax Cuts and Jobs Act (TCJA), with a strong focus on sustaining individual and business tax relief. The Bill now moves to the Senate for further deliberation, where it is expected to be taken up before the end of June 2025. While the Senate may introduce amendments, final enactment—subject to the approval of President Trump which is anticipated by 4 July 2025.
Key highlights include:
• For individuals:
Extension of Lower Individual Income Tax Rates under the TCJA, maintaining the top marginal tax rate at 37%.
Permanent increase in the standard deduction, with a temporary $2,000 bonus for married couples filing jointly (applicable from 2025 to 2028).
Exemptions from federal income tax on tips, overtime pay, and interest on auto loans for American-made vehicles.
Estate and gift tax exemption increased to $15 million per individual, indexed annually for inflation.
• For businesses:
Pass-through deduction enhanced to 23%.
100% expensing reinstated for qualified property through 2029.
EBITDA-based limitation restored for business interest deductions.
These changes are designed to stimulate growth and increase after-tax income. Projections estimate an average tax cut of $1,300 per household, with potential increases in take-home pay up to $13,300. It is important to note that the bill is expected to add between $2.3 trillion and $3.8 trillion to the federal deficit over the next decade.