What the Big Beautiful Bill Means for You
President Trump signed the Big Beautiful Bill into law on July 4, marking his first major legislative victory of his second term. What does this mean for tax payers? Here, we will take a look at some of the main provisions for businesses and individuals.
For Individual Taxpayers
- Permanent extension of 2017 tax cuts
The individual income tax rates from the 2017 Tax Cuts and Jobs Act are now made permanent and will no longer expire in 2025. That means the top tax rate stays at 37%, instead of rising back to 39.6% as it was scheduled to in 2026. - New deductions for low- and middle-income earners
- Federal income tax on tips (cash) and overtime pay is eliminated via new deductions capped at $25,000 each (phasing out above certain incomes) through 2028. These deductions phase out for individuals earning over $200,000 and joint filers earning over $300,000.
- A new $6,000 deduction per senior (up to $12,000 per couple) on Social Security benefits helps significantly reduce taxation of Social Security, allowing roughly 88% of seniors to avoid tax on their benefits.
- Increased child tax credit
The child tax credit is raised from $2,000 to $2,200 per child, indexed to inflation. - Auto loan interest deduction
Taxpayers buying U.S.-assembled vehicles between 2025–2028 can deduct up to $10,000 per year in loan interest (with income phase-outs). - Modified SALT Cap
The state and local tax deduction cap is temporarily raised to $40,000 (for incomes under $500K), reverting to $10,000 after 2030.
For Businesses
- Retention of corporate and pass-through benefits
The flat 21% corporate tax rate is now permanent. The 20% pass‑through deduction (Section 199A), is also made permanent and Section 179 depreciation for qualifying property has been extended, with a new cap of $1.5 million. - 100% bonus depreciation
Businesses can fully deduct the cost of new equipment upfront, instead of spreading it out over several years. This provision has been made permanent. - Other industry-specific benefits
Incentives include expanded manufacturer credits and unchanged tax treatment for semiconductor and auto sectors.
Budgetary & Social Impacts
While the bill offers broad tax relief, it also makes deep cuts to Medicaid, SNAP (food stamps), clean-energy incentives, and other social programs. According to the Congressional Budget Office:
- Deficit increases: An estimated $2.4–2.8 trillion will be added to the deficit by 2034.
- COVID-era clean energy rollbacks: The bill eliminates many Biden-era Inflation Reduction Act incentives.
- Health coverage loss: Approximately 11 million Americans are projected to lose health insurance coverage by 2034 due to Medicaid cutbacks.
Final Takeaways
- Individuals get permanent rate cuts, relief on tips/overtime/Social Security income, stronger credits for children and auto buyers—but may lose some value from SALT. Low-income Americans face consequences from program cuts.
- Businesses benefit significantly in tax certainty, depreciation, and pass-through treatment, boosting capital investment
- Deficits and Debt Rise — The bill will lead to larger deficits and rising debt.
Action Steps to Take Advantage of Tax Changes
Here’s what you can do right now to benefit from these tax changes:
- Review your current tax strategy—the changes are already in effect.
- Track eligible deductions like tips, overtime, vehicle purchases, and business equipment.
- Consider restructuring your business or retirement plan to maximize new benefits.
- Book a midyear review with us—so we can implement changes while there’s still time. Don’t wait until December to do it. That might be too late!
- Tax law just changed in a big way. Don’t leave money on the table.
Whether you’re an individual or a business, now’s the time to take control of your 2025 tax strategy. Partner with Mirror Accounting Services to tailor your 2025 tax strategy and ensure you’re making the most out of these changes.