What the 2025 Tax Bill Means for You and Your Business

On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill,” a sweeping tax reform package that cements many of the 2017 tax cuts and introduces new provisions aimed at individuals, families, and businesses^1,2.

This legislation not only prevents the expiration of the 2017 Tax Cuts and Jobs Act (TCJA) provisions but also introduces new deductions and incentives that could significantly impact your tax liability depending on your household situation. Overall, the bill would prevent tax increases on 62 percent of taxpayers that would occur if the TCJA expired after 2025 as scheduled⁴.

Individual Tax Impacts: What Changed?

The new law prevents the expiration of the 2017 Tax Cuts and Jobs Act (TCJA) provisions, which were set to sunset at the end of 2025. Here’s how the new law compares to both the pre-2017 tax code and what was in place before this bill passed^1,2:

Tax Feature	Pre-2017 Law	2025 Law Before Bill	New 2025 Law
Top Individual Rate	39.6%	37% (set to expire)	37% (now permanent)
Standard Deduction	~$6,350 (single) x2 for married	$13,850 (single) x2 for married	$13,850 (extended) x2 for married
Personal Exemptions	Allowed	Eliminated	Still eliminated
Child Tax Credit	$1,000	$2,000	$2,200
SALT Deduction Cap	No cap	$10,000	$40,000 (for 5 years)
Estate Tax Exemption	~$5.5M	~$13.6M	Extended at ~$13.6M
Tip & Overtime Deductions	Not deductible	Not deductible	Up to $25,000 deductible (temporary)
Older Adult Deduction	N/A	N/A	$6,000 for 65+ earning <$75K

Example Scenarios

A family of five (two parents and three children) earning $120,000 annually will benefit from the expanded Child Tax Credit ($2,200 per child), totaling $6,600 in credits ($600 more in tax credits & savings than pre-bill). They also retain the higher standard deduction and avoid the higher pre-2017 tax brackets¹.
A senior citizen over age 65 earning $60,000 annually will now qualify for a new $6,000 deduction, reducing their taxable income and potentially lowering their tax bracket. This is in addition to the standard deduction and other age-related benefits¹.

Business Incentives: What’s New?

The bill includes major incentives for businesses, especially small and mid-sized enterprises:

Immediate Expensing: Businesses can now write off 100% of equipment and R&D costs immediately, improving cash flow and encouraging reinvestment¹.

Example: Before the 2025 Bill, a small manufacturing company purchasing $100,000 in machinery would depreciate it over 5 years—deducting just $20,000 annually. Under the new law, the full $100,000 can be deducted in Year 1, reducing taxable income significantly and immediately freeing up cash for hiring, expansion, or R&D.

Small Business Boost: This change accelerates tax savings and boosts liquidity, which is especially valuable for small businesses managing tight margins or planning for growth. The legislation is projected to protect or create up to 7.2 million jobs, with small businesses expected to generate 1 million new jobs annually⁴.

Bottom Line

This legislation locks in lower tax rates, expands deductions for families and seniors, and delivers powerful incentives for business investment. It avoids the tax hikes that would have occurred had the 2017 provisions expired, offering us more predictability for both individuals and companies with our planning moving forward^1,2.

We will be reviewing your tax strategy through year-end to prepare for these changes in 2026, so please ensure we have your 2024 tax return on hand before our next meeting.

References