01/11/2026
"One big beautiful bill" refers to the One, Big, Beautiful Bill Act (OBBBA), a major piece of federal legislation signed into law by President Trump on July 4, 2025. Formally designated as Public Law 119-21, it enacts significant tax cuts, spending shifts, and border security measures that represent the core of the administration's second-term agenda.
As of early 2026, many of its tax provisions are now in effect for the current tax filing season. Key highlights of the Act include:
Major Tax Relief & Deductions
No Tax on Tips: Workers in eligible occupations can deduct up to $25,000 in qualified tip income for tax years 2025 through 2028.
No Tax on Overtime: Individuals can deduct the "extra half" portion of time-and-a-half overtime pay, capped at $12,500 ($25,000 for joint filers).
Deduction for Seniors: Taxpayers aged 65 and older receive an additional $6,000 deduction (per individual), effectively shielding a larger portion of Social Security or other income from federal taxes.
Made-in-America Auto Interest: A new deduction of up to $10,000 is available for interest paid on loans for vehicles with final assembly in the United States.
Permanent TCJA Rates: The law makes permanent the individual tax brackets and the higher standard deduction from the 2017 Tax Cuts and Jobs Act, which were originally set to expire at the end of 2025.
Economic & Family Provisions
Trump Accounts: A new type of tax-advantaged savings account for children. The federal government will provide a one-time $1,000 contribution for eligible children born between 2025 and 2028.
Child Tax Credit Expansion: The maximum credit increased to $2,200 per child and is now indexed to inflation.
SALT Cap Increase: The state and local tax deduction cap was raised from $10,000 to $40,000 through 2029 for those earning under $500,000.
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