The Big Beautiful Bill: A New Era of Tax Policy

The “Big Beautiful Bill,” officially named the One Big Beautiful Bill Act, represents one of the most significant overhauls of the U.S. tax code in recent years. Signed into law on July 4, 2025, the legislation introduces a range of tax changes affecting individuals, families, and businesses. One of the key features of the bill is the permanent extension of tax cuts originally enacted in 2017, which affect both individual and corporate taxpayers. Additionally, the bill introduces new exemptions, such as allowing workers in certain professions to deduct up to $25,000 in tip income and those earning overtime to deduct up to $12,500, provided their annual income is under $150,000.

The Child Tax Credit is also expanded, increasing to $2,200 per child beginning in 2025. For residents of high-tax states, the State and Local Tax (SALT) deduction cap is temporarily raised from $10,000 to $40,000 for households earning under $500,000.

For businesses, the bill makes several significant changes to business taxation. The 100% bonus depreciation for qualified property is extended through 2030, and the domestic research and experimental expenses deduction is temporarily restored through 2029. The estate and gift tax exemption is permanently raised to $15 million per individual. These provisions are designed to provide ongoing tax relief and incentives for investment and wealth transfer.

The tax implications of the bill are mixed. Higher-income households and business owners are likely to see the most significant benefits due to expanded deductions and credits. Homeowners in high-tax states and retirees may also benefit from increased deductions.

From a fiscal perspective, estimates suggest the legislation could reduce federal tax revenue by approximately $4 trillion between 2025 and 2034, with some analyses indicating it could add $2.4 trillion to primary deficits over the coming decade. Supporters argue the bill provides meaningful tax relief to the middle class and encourages economic growth, while critics raise concerns about the distribution of benefits and the long-term impact on the national debt. As with any major tax legislation, individuals and businesses are encouraged to consult with tax professionals to fully understand how these changes may affect their financial situation.

If you have any questions on how this legislation might impact you, please contact McNeelyLaw LLP by calling (317) 825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

Sources:

• Congressional Budget Office, “Cost Estimate for the One Big Beautiful Bill Act,” July 2025.
• Tax Foundation, “Analysis of the One Big Beautiful Bill Act,” July 2025.
• Committee for a Responsible Federal Budget, “Breaking Down the One Big Beautiful Bill,” June 2025.
• https://www.cnbc.com/2025/07/03/trump-big-beautiful-bill-tax-changes.html
• https://www.crfb.org/blogs/breaking-down-one-big-beautiful-bill