Major Tax Reform in the One Big Beautiful Bill Act (OBBBA)

The One Big Beautiful Bill Act (OBBBA) represents the most comprehensive tax legislation in years, fundamentally reshaping the American tax landscape for individuals, businesses, and organizations across all sectors. With the bill now finalized, taxpayers face a complex array of changes that demand immediate attention and strategic planning.

What Makes OBBBA So Significant?

This sweeping legislation touches virtually every aspect of the tax code, from individual deductions and credits to international business operations. The changes are not just extensive—they're immediate, with many provisions taking effect in 2025 and others already in force. The complexity and scope mean that almost every American taxpayer will be affected in some way.

Key Areas of Impact

• Individual Taxpayers will see significant changes including permanent extensions of Tax Cuts and Jobs Act provisions, enhanced child tax credits, new deductions for tip income and overtime pay, and a temporary personal exemption for seniors. The standard deduction increases permanently, while the state and local tax (SALT) cap receives temporary relief.

  
  

• Businesses benefit from restored 100% bonus depreciation, immediate expensing of domestic research and development costs, and doubled Section 179 deduction limits. The legislation also includes provisions affecting everything from executive compensation to international tax planning.

• Specialized Sectors face targeted changes, with energy companies seeing shifts in clean energy incentives, tax-exempt organizations confronting new excise tax structures, and various industries navigating updated compliance requirements.

Why This Matters Now

The OBBBA's complexity creates both opportunities and challenges. Many provisions offer different implementation options, and the varying effective dates require careful timing. Some changes could affect third-quarter financial statements and estimated tax payments, making immediate action crucial for many taxpayers.

The legislation's time-sensitive nature means businesses and individuals must act quickly to capitalize on available benefits while ensuring compliance with new requirements.

Getting the Full Picture

As members of the BDO Alliance USA, we're sharing a comprehensive resource from BDO that breaks down every major provision of the OBBBA. This detailed analysis provides side-by-side comparisons of pre-enactment law versus the new changes, complete with effective dates and implementation details.

www.bdo.com

Table of Key Tax Provisions in OBBBA

Changes in tax laws can significantly impact financial planning and operational strategies. Stay informed and prepared.

This resource is essential reading for anyone looking to understand how the OBBBA will impact their tax situation. Whether you're an individual taxpayer, business owner, or tax professional, this comprehensive breakdown will help you identify the changes most relevant to your circumstances and plan accordingly.

The stakes are high, but so are the potential benefits for those who understand and strategically respond to these sweeping changes. Don't let the complexity overwhelm you—use this resource to stay informed and make the most of the new tax landscape.

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Questions?

Contact HFM CPAs for a complimentary consultation. Our team brings years of tax experience to help you navigate new tax laws and how they affect you and your business.

HFM CPAs provides specialized accounting, tax, and assurance services to individuals and businesses across Connecticut and Rhode Island.