| |
|
Assuming that the Senate passes its version of the legislation, the House would need to vote again since the Senate version will include changes. |
|
New Tax Legislation: What's on the Table
The One Big Beautiful Bill Act
H.R. 1, the One Big Beautiful Bill Act, narrowly passed the House of Representatives on May 22, 2025. The legislation is now being deliberated in the Senate, after the Senate Committee on Finance released its own version of proposed tax provisions on June 16, 2025.
This legislation is being proposed and considered as part of a process known as budget reconciliation, which is generally limited to tax and spending matters, as well as the debt limit. The budget reconciliation process limits debate, preventing the use of the filibuster to delay or prevent passage. Whereas 60 votes are required to break a filibuster and pass most legislation, budget reconciliation requires only 51 votes in the Senate. The following are some of the act's provisions that could affect income taxes for individuals and businesses.
Tax Cuts and Jobs Act provisions made permanent
The legislation would make permanent many provisions implemented by the 2017 Tax Cuts and Jobs Act, which are scheduled to expire at the end of this year. These include:
- Lower marginal income tax rates, with a top marginal tax rate of 37%
- Increased standard deduction amounts
- Elimination of deduction for personal exemptions
- Increased Child Tax Credit (some additional changes proposed)
- Limits on mortgage interest deductions and interest on home equity debt
- Higher estate and gift tax exemption
- Alternative Minimum Tax (AMT) exemption and phaseout thresholds
- Changes relating to itemized deductions
- Section 199A Qualified Business Income Deduction
Other changes
The legislation includes a host of additional tax provisions, such as:
- Raising the U.S. debt limit
- Additional deduction for seniors for years 2025–2028, phased out at higher incomes
- New tax-exempt investment accounts ("Trump Accounts") for children
- State and Local Tax (SALT) deduction; while the House version would significantly increase the cap, the Senate version appears to retain the current $10,000 cap
- New deduction for qualified tips
- New deduction for qualified overtime compensation
- New deduction for personal interest on car loans (2025–2028, U.S.-assembled passenger vehicles)
- New charitable deduction for individuals who do not itemize deductions
- Repeal of energy tax credits created by the Inflation Reduction Act
- Bonus depreciation increased to 100% and Section 179 expensing limit increased
What happens next?
The Senate Committee on Finance report already reflects some departures from the House version, including differences relating to the SALT deduction, mentioned above, as well as the tax treatment of tips and overtime. The legislation is subject to review by the Senate parliamentarian for compliance with reconciliation rules, and the final Senate version of the legislation must be debated on the Senate floor. Assuming that the Senate passes its version of the legislation, the House would need to vote again since the Senate version will include changes. |
|
|
|
The material presented includes information and opinions provided by a party not related to Thrivent. It has been obtained from sources deemed reliable; but no independent verification has been made, nor is its accuracy or completeness guaranteed. The opinions expressed may not necessarily represent those of Thrivent or its affiliates. They are provided solely for information purposes and are not to be construed as solicitations or offers to buy or sell any products, securities or services. Thrivent and its affiliates accept no liability for loss or damage of any kind arising from the use of this information. Concepts presented are intended for educational purposes. This information should not be considered investment advice or a recommendation of any particular security, strategy, or product. The concepts in this presentation are intended for educational purposes only. They may not be suitable for your client’s particular situation. The suitability of any specific product or strategy will be dependent upon your clients’ particular situation.
Hypothetical example is for illustrative purposes. May not be representative of actual results. Past performance is not necessarily indicative of future results.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
Thrivent financial advisors and professionals have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration.
Thrivent is the marketing name for Thrivent Financial for Lutherans. Insurance products issued by Thrivent. Not available in all states. Securities and investment advisory services offered through Thrivent Investment Management Inc., a registered investment adviser, member FINRA and SIPC, and a subsidiary of Thrivent. Licensed agent/producer of Thrivent. Registered representative of Thrivent Investment Management, Inc. Thrivent.com/disclosures.
Insurance products, securities and investment advisory services are provided by appropriately appointed and licensed financial advisors and professionals. Only individuals who are financial advisors are credentialed to provide investment advisory services. Visit Thrivent.com or FINRA’s Broker Check for more information about our financial advisors.
A licensed insurance agent/producer may contact you and financial solutions, including insurance may be solicited.
Certified Financial Planner Board of Standards Inc. (CPF Board) owns the CFP® certification mark (with plaque design) logo in the United States, which it authorized use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 3172761.4 |
Prepared by Broadridge Advisor Solutions Copyright 2025.
To opt-out of future emails, please click here. |
|
|
