Congress Passes Landmark Tax Legislation: What the New Bill Means for You

On July 3, 2025, Congress passed the most sweeping tax legislation since 2017. Known unofficially as the One Big Beautiful Bill Act, this new reconciliation bill permanently extends key elements of the Tax Cuts and Jobs Act (TCJA) and introduces a host of new provisions affecting individuals and businesses alike. At The Whitlock Company, we are committed to helping our clients understand and navigate these changes as they prepare for the 2025 tax year and beyond.

Below is a breakdown of the most important highlights from the legislation and what it could mean for your financial strategy.

Key Provisions for Individuals

Permanent Extension of TCJA Benefits

Many tax provisions originally slated to expire after 2025 are now permanent

• Retention of the lower individual tax brackets (10%–37%)
• Increased standard deduction (adjusted for inflation)
• Elimination of the personal exemption, replaced with a $6,000 deduction for seniors (2025–2029)
• Continued cap on mortgage interest, casualty loss, and miscellaneous itemized deductions
• Extended alternative minimum tax (AMT) exemption thresholds

Changes to the SALT Deduction

The limit on deducting state and local taxes (SALT) will rise from $10,000 to $40,000 in 2025. That limit will grow slightly each year until 2029, then drop back to $10,000 in 2030. High earners may see reduced benefits here.

Boost to the Child Tax Credit

The credit is permanently increased to $2,200 per child, adjusted for inflation. The refundable portion remains capped at $1,400, and all family members must have Social Security numbers to qualify.

New Individual Tax Breaks

No Tax on Tips and Overtime

You can now deduct up to $25,000 in tip income (without itemizing), through 2028. This deduction phases out at higher income tax brackets. Overtime pay also gets a break; you can now deduct up to $12,500 in overtime wages (also through 2028).

Automobile Loan Interest Deduction

Interest on car loans will be deductible up to $10,000 for purchases made after 2024, through 2028.

“Trump Accounts” for Children

Tax-advantaged savings accounts will be seeded with $1,000 for each newborn. They work like IRAs for kids.

Key Business Provisions

Bonus Depreciation is Back & Permanent

Businesses can now permanently deduct 100% of the cost of qualifying property placed in service after January 19, 2025.

R&D Expensing

Businesses may once again deduct domestic research and experimental expenditures, with some retroactive benefits for small businesses back to 2022.

Qualified Business Income Deduction (QBI)

The popular 20% deduction for pass-through business income (Section 199A) is now permanent and expanded in scope.

Other Noteworthy Changes

• Increased Section 179 expensing limits
• Interest income exclusions for rural/agricultural real estate loans
• Adjustments to low-income housing tax credits

Significant Green Energy Rollbacks

To offset the cost of the bill, estimated at $5 trillion over ten years, many clean energy tax credits introduced in the Inflation Reduction Act of 2022 have been eliminated. This includes:

• Credits for new and used clean vehicles
• Residential and commercial clean energy improvements
• Alternative fuel infrastructure and home efficiency upgrades

Most of these credits expire after 2025, though transition relief will apply for some in-progress projects.

Contact your Whitlock advisor today to schedule a consultation and ensure you’re prepared for this new tax landscape.