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Key Questions: What Tax Proposals Are in the 'One Big Beautiful Bill Act' That All Taxpayers Should Be Aware Of?

June 2025

<p>Key Questions: What Tax Proposals Are in the 'One Big Beautiful Bill Act' That All Taxpayers Should Be Aware Of?</p>

The Key Wealth Institute is a team of highly experienced professionals representing various disciplines within wealth management who are dedicated to delivering timely insights and practical advice. From strategies designed to better manage your wealth, to guidance to help you better understand the world impacting your wealth, Key Wealth Institute provides proactive insights needed to navigate your financial journey.

The House of Representatives on May 22 passed the One Big Beautiful Bill, reflecting the tax and spending priorities of President Trump and congressional Republicans.

The bill now heads to the Senate, where it will likely be changed. How the bill ultimately takes shape will become clearer over the next several weeks and months.

Below are charts comparing Key individual, business, trust, estate, and exempt organizations’ tax provisions under current law with proposed changes contained in the House Bill.

Individual Provisions

Tax itemCurrent lawHouse Bill proposal
Individual income tax rates

The top marginal tax rate is 37% for income over $626,350 for individuals and $751,600 for married individuals filing jointly.

Rates are scheduled to increase to pre-Tax Cuts and Jobs Act (TCJA) amounts after 2025.

Makes TCJA rates permanent.
Standard deductionThe standard deduction for married individuals filing jointly is $30,000. After 2025, the basic standard deduction is scheduled to sunset to pre-TCJA amounts.

Permanently increases the standard deduction and adds a temporary enhancement for 2025–2028:

  • $2,000 for joint filers

  • $1,500 for heads of household

  • $1,000 for all others

Personal exemptionsThe TCJA suspended the personal exemption deduction through 2025.Permanently eliminates deduction for personal exemptions.
Child Tax Credit (CTC)The maximum child tax credit is $2,000 and only a portion ($1,700) is currently refundable. This credit will revert to $1,000 after 2025.

  • $2,500 per child for 2025–2028

  • $2,000 post-2028

Pass-through business deductionUnder Section 199A, individuals, estates, and trusts can deduct 20% of qualified business income from pass-through businesses like partnerships and S corporations, subject to certain limits.Makes deduction permanent and increases to 23%, with modifications for specified service businesses.
Alternative Minimum Tax (AMT) exemptionThe TCJA increased the exemption amounts and the exemption amount phaseout thresholds for the individual AMT.Makes higher exemption and phase-out thresholds permanent.
Mortgage interest deduction$750,000 acquisition indebtedness limit (TCJA) expires after 2025.Makes $750,000 limit permanent.
Casualty loss deductionLimited deduction to federally declared disasters only (TCJA) through 2025.Makes limitation permanent.
Miscellaneous itemized deductionsSuspended most personal deductions through 2025 (TCJA); scheduled to return in 2026.Permanently terminates deduction.
Pease limitation (itemized deductions phaseouts)Suspended through 2025 (TCJA); scheduled to return in 2026.Make permanent the repeal of Pease limitation and impose new limitation for taxpayers in 37% income bracket.
Moving expenses deductionSuspended for most from 2018–2025 (TCJA); returns in 2026.Permanently terminates deduction except for military.
Wagering lossesLimited to itemized deduction based on the amount of winnings through 2025.Makes limitation permanent.
Charitable deduction for non-itemizersDeduction not available after 2021.Creates deduction, $150 ($300 joint) through 2028.
No tax on tipsTips are subject to taxation.Allows deduction for qualified tips received in certain occupations; deduction expires after 2028.
No tax on overtimeOvertime pay is taxable income.Allows deduction for qualified overtime compensation; deduction expires after 2028.
Enhanced deduction for seniorsAdditional standard deduction up to $2,000 is available for those older than 65.Adds $4,000 bonus deduction for seniors (2025–2028), phased out at higher incomes.
No tax on car loan interestPersonal interest on car loans currently not deductible.Allows deduction for up to $10,000 of interest on new car loans; final assembly must take place in United States; both itemizers and nonitemizers benefit.
Adoption creditCredit is nonrefundable.Makes $5,000 of the credit refundable.
529 plan qualified expensesLimited to higher education and $10,000 K-12 tuition.Expands to include more K-12 and homeschool expenses.
State and local tax (SALT) deductionCurrently capped at $10,000.Increase cap to $40,000 and contain limitation for incomes over $500,000.

 

Business Provisions

Tax itemCurrent lawHouse Bill proposal
Employer-Provided Childcare CreditTax credit up to $150,000 per year to offset 25% of qualified childcare expenditures.Increases credit to 40% (50% for small businesses) with maximum credits of $500,000 ($600,000 for small businesses).
Paid Family and Medical Leave CreditTemporary, expires after 2025.Extends and enhances credit.
Research and experimental (R&D)Generally requires amortization over five years for domestic R&D.Allows full expensing of domestic R&D from January 1, 2025, through 2029; amortization resumes in 2030.
Bonus depreciationDeduction limited to 40% in 2025 for qualified purchases, phases down to 20% in 2026 and 0% in 2027.Restores 100% bonus depreciation for property placed in service from January 19, 2025, through December 31, 2029.
Business interest deduction limitation (Sec. 163j)Business interest deductions generally are limited to 30% of taxpayer’s adjusted taxable income.For tax years 2025–2029, reinstates the more taxpayer favorable EBITDA.
Charitable deduction for corporationsLimited to 10% of taxable income, excess carried forward for five years.Adds 1% floor; only contributions above 1% of taxable income are deductible, up to existing 10% limit.

Trust, Estate, and Tax-Exempt Provisions

Tax itemCurrent lawHouse Bill proposal
Trust tax ratesFor 2025, highest tax rate is 37% (for incomes greater than $3,777), rate set to increase to 39.6% in 2026.Makes permanent current tax rates for trusts and estates, including highest rate at 37%.
State and local tax (SALT) deductionCurrently capped at $10,000.Makes SALT cap rules that apply to individuals to also apply to trusts and estates.
Estate and gift tax exemptionFor 2025, the estate and gift tax exemption is $13.99 million. This amount is scheduled to revert to $5 million in 2026.Increases exemption to $15 million and makes higher exemption permanent.
Excise tax on private foundationsExcise tax on net investment income is 1.39%.Introduce tiered tax structure ranging from current rate to 10%, depending on foundation’s asset values.

For more information, please contact your advisor.

The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).

Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates.

This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy.

KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment or tax planning decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice.

The summaries, prices, quotes and/or statistics contained herein have been obtained from sources believed to be reliable but are not necessarily complete and cannot be guaranteed. They are provided for informational purposes only and are not intended to replace any confirmations or statements. Past performance does not guarantee future results.

Investment products, brokerage and investment advisory services are offered through KIS, member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KIA. Insurance products offered through KIA are underwritten by and the obligation of insurance companies that are not affiliated with KeyBank. 

Non-Deposit products are:

NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY