Key Insights from the One Big Beautiful Bill Act

The world of taxation may undergo a significant transformation with the proposed One Big Beautiful Bill Act, and tax attorneys Matt Carlson and Travis Thompson break down the critical changes that could impact individuals and businesses alike.

The Looming Tax Cliff

As Matt Carlson explains, “We’ve been living in the world of the Tax Cuts and Jobs Act since 2017, and many of its key provisions are set to expire at the end of 2025.” This “tax cliff” threatens to dramatically alter the current tax landscape, with potential increases in marginal tax rates and reductions in key deductions.

Individual Tax Relief Highlights

Travis Thompson highlights some bright spots for individual taxpayers: “The bill keeps individual income tax rates lower than pre-2017 levels, with the highest earners still taxed at 35% and 37%.” Notably, the One Big Beautiful Bill Act introduces some creative tax relief, including:

• No tax on tips
• No tax on overtime for non-highly compensated employees
• Extended child tax credits
• Deductions for car loan interest

Business Owners Take Note

For business owners, there’s good news. “The Section 199A deduction is now permanent at 23% for sole proprietors, pass-through entities, trusts, and estates,” Travis Thompson points out. Matt Carlson adds that bonus depreciation will be extended through 2029, providing significant tax advantages for businesses investing in equipment.

IRS Enforcement Challenges

The tax landscape isn’t just about numbers. Matt Carlson shares insights into the current IRS challenges: “We’ve been managing client expectations due to significant delays and staffing issues since COVID.” Travis Thompson notes that despite these challenges, they’re “busier than ever with IRS cases.”

What’s Next for the One Big Beautiful Bill Act?

The One Big Beautiful Bill Act has passed the House but still needs Senate approval. As Matt Carlson cautions, “We anticipate significant changes as the bill moves through the Senate.”

Key Takeaways:

• Potential permanent extensions of key tax provisions
• New tax relief for workers and businesses
• Continued complexity in tax planning and compliance

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A special thank you to Michele Bisceglie for moderating the discussion and to SCG Legal for editing and publishing this Global Spin episode.