Big Beautiful Bill Guide
Complete guide to understanding the One Big Beautiful Bill Act (H.R.1) and its tax benefits
Bill Overview
Official Name: One Big Beautiful Bill Act
Bill Number: H.R.1
Status: Enacted into Law
Effective Period: Tax Years 2025-2028
Key Benefit: Significant tax relief for working families
Who Benefits
- Service workers earning tips
- Employees working overtime
- Families with children
- Senior citizens (65+)
- Small business owners
- High state tax areas
Major Tax Benefits
100% Tax-Free Income
Tip Income Exclusion
All tip income is completely excluded from federal income tax, including:
- Cash tips from customers
- Credit card tips processed by employers
- Tip pooling and sharing arrangements
- Service charges distributed as tips
Overtime Income Exclusion
All overtime compensation is excluded from federal income tax, including:
- Time-and-a-half pay (1.5x regular rate)
- Double-time pay (2x regular rate)
- Weekend and holiday premium pay
- Emergency call-in overtime
Enhanced Deductions & Credits
Enhanced Standard Deductions
Increased standard deductions for all filing statuses:
- Single: $15,000 (vs $14,600 current)
- Married Filing Jointly: $30,000 (vs $29,200 current)
- Head of Household: $22,500 (vs $21,900 current)
Senior Bonus: Additional $1,650 for taxpayers 65 and older
Enhanced Child Tax Credit
$2,500 per child (increased from $2,000) for qualifying children under 17
Enhanced SALT Deduction
State and Local Tax (SALT) deduction cap increased from $10,000 to $30,000
Especially beneficial for residents of high-tax states
Business & Self-Employment Benefits
Enhanced QBI Deduction
Qualified Business Income (QBI) deduction enhanced from 20% to 23%
Benefits small businesses, partnerships, S-Corps, and sole proprietorships
Additional Business Deductions
- R&D Expense Bonus: 25% enhancement
- Equipment Depreciation: 20% bonus
- Small Business Bonus: $10,000 for qualifying businesses
Implementation Timeline
2025 Full Implementation
All provisions take effect for the 2025 tax year
2025-2028 Enhanced Benefits Period
Enhanced child tax credits and senior deductions in effect
2029+ Permanent Provisions
Tip and overtime exclusions, enhanced standard deductions continue permanently
How to Maximize Your Benefits
For Service Workers
- Track all tip income accurately
- Keep records of cash and credit card tips
- Report tips separately from regular wages
- Use our Individual Calculator to see savings
For Overtime Workers
- Distinguish overtime from regular pay
- Track time-and-a-half vs double-time
- Keep payroll records for verification
- Calculate potential tax savings
For Families & Seniors
- Claim enhanced child tax credits
- Take advantage of senior deductions if 65+
- Consider enhanced standard deduction
- Review SALT deduction benefits
Important Reminders
- These provisions apply to federal income tax only
- State tax laws may vary - consult local tax professionals
- Keep detailed records of tip and overtime income
- Use our calculators to estimate your specific benefits
- Consult qualified tax professionals for personalized advice