As a result of the Tax Cuts and Jobs Act (TCJA) of 2017, many federal tax cuts and accounting regulations were introduced that were set to expire after 2025. These changes and cuts affect deductions, depreciation write offs, regulations specific to business entity type, tax benefits for investing in Opportunity Zones, and more (for a full breakdown of these changes, read more here from the IRS). Now that the deadline is looming for these changes, a massive priority of the Republican majority in Washington D.C. is not only to renew these changes and make them permanent, but also to introduce new changes that affect the Federal Government’s budget and debt ceiling. The collection of these proposals is a bill named the “One Big Beautiful Bill Act” (OBBBA). Regardless of whether the Republican-authored bill is signed into law, there are going to be significant tax implications for individuals as well as corporations.
Where the Bill Stands Now
The bill originated in the House of Representatives and passed with a simple majority due to a procedure called ‘reconciliation’. That draft of the Bill advanced, to be reviewed by the Senate Finance Committee, on May 22, 2025. Since then, the Committee has added its own provisions that send the draft back to the House. Only after the draft of the bill is approved by both the House of Representatives and the Senate Finance Committee will it proceed to a vote by the entire Senate body. At this final stage of enacting the bill, only a simple majority will be required once again.
The President has requested a copy of the bill on his desk, passed by congress, by July 4, 2025; however, this is not guaranteed. Republican lawmakers hold a narrow majority in both chambers of congress, and there are a handful of fiscally conservative GOP hard-liners that threaten to vote outside of party lines, primarily over concerns of raising the debt ceiling.
The nonpartisan, non-profit Committee for a Responsible Federal Budget’s website provides a continuously updated tracker here, which also includes proposed funding dollar amounts sorted by governmental departments.
If Congress Never Passes the OBBBA
If the bill does not pass congress, the tax code will revert to its former regulations prior to the TCJA of 2017. Some of the most significant changes from the TCJA that would disappear if the OBBBA does not become law include the reduced tax rates for individuals across most income brackets, the increase of standard deductions, the $10,000 cap on deductions for State and local taxes (SALT), and the multi-million increase of estate tax exemptions.
If Congress Does Pass the OBBBA
Even if the TCJA items listed above are codified permanently, there are expected changes to many of those items currently in effect. For instance, the SALT deduction cap is expected to rise before passing the OBBBA. New items include a tax deduction for tip wages (that will most likely be capped), an increase in child tax credit along with partially government-matched savings for newborns, and eliminating numerous energy subsidies and tax credits.
How Bowman Can Help
This article serves to inform you of changes that may be coming as soon as the 2026 tax year; but understand that the policies outlined in the draft OBBBA bill are subject to change. Whether or not the OBBBA is signed into law, we will supply more information on any suggested preparatory actions to maximize your tax deductions. You can contact your Bowman representative with further questions. Bowman tax specialist and Senior Manager, Dave Evans, can be reached using the button below.