Here’s a clear overview of the “Big Beautiful Tax Bill” (officially the One Big Beautiful Bill Act, or OBBBA) and how it could affect individuals and business owners:

What Is the Big Beautiful Bill?

This is a sweeping legislative package passed by the House on May 22, 2025, and now pending in the Senate. It combines three major elements:

Making the 2017 Trump individual tax cuts permanent (set to expire end of 2025).
New tax breaks—notably exemptions on tips, overtime pay, car-loan interest, and expanded child and senior credits.
Cuts to social programs such as Medicaid and Supplemental Nutrition Assistance Program (SNAP), alongside substantial spending on defense, border security, and rolling back green‑energy incentives.

Key Provisions

Standard & Child Tax Credits

Doubled standard deduction becomes permanent (e.g., married filers: $32,600 in 2026), plus extra annual boost through 2028
Child tax credit stays at $2,000 per child (bumped to $2,500 temporarily).

New Perks & Deductions

No tax on tip income and overtime earnings.
Deductions for car loan interest and a new savings account (“MAGA account”) for children.

SALT Deduction Changes

The popular cap on State and Local Tax deductions is raised (from $10,000) to $30,000–$40,000 depending on filer income.

Small‑Business Boosts

Section 199A deduction rises from 20% to 23%, made permanent—benefiting 25+ million pass-through entities.
100% immediate expensing for equipment investments returned, encouraging new capital spending.

Program Cuts

Reduces Medicaid and SNAP funding via stricter rules and shifting costs to states.
Green‑energy incentives from the Inflation Reduction Act face rollbacks.

How It Affects Individuals

Middle- and lower-income households may see modest tax savings, particularly if they earn tip or overtime income, have kids, or are retirees. However:

The poorest households could lose healthcare benefits and food assistance once Medicaid and SNAP changes take effect—up to 16 million people might lose coverage.
Wealthy individuals, especially high‑income filers and those in high‑tax states, stand to gain the most—some could save tens of thousands per year.

How It Affects Business Owners

Small business owners (pass-throughs, equipment-reliant firms) win. They’ll get permanent expanded expensing and higher pass-through deduction—proponents argue it helps nearly 33 million businesses.
But some service professionals (lawyers, dentists, etc.) might face limits on workaround strategies tied to SALT caps.

Broader Economic & Fiscal Impact

Deficit impact: The bill would add $2.4–2.8 trillion to the ten-year federal deficit, based on Congressional Budget Office (CBO) and other budget-focused agencies.
Interest rates: Increased national debt could push up interest rates, affecting mortgages and business loans.
Growth vs. Equity: Critics argue tax breaks heavily favor the wealthy and short‑term gains don’t necessarily stimulate long‑term economic growth.

Quick Summary Table

Next Legislative Steps

Here’s where the Big Beautiful Bill (One Big Beautiful Bill Act) stands and what taxpayers should watch next:

Senate reconciliation process: The Senate is refining the bill under the budget reconciliation rules, aiming for a vote before July 4 to beat the recess deadline. Majority Leader John Thune wants a vote by week’s end, and Trump is pressuring Republicans to stay in session until it passes.
Parliamentarian reviews: Senate Parliamentarian Elizabeth MacDonough has already struck multiple provisions (e.g. land sales, SNAP cost-shifting, environmental rollbacks) for violating the Byrd Rule, forcing GOP rewrites. Any provisions ruled out now require 60 votes to reinstate—unlikely with a 53-seat GOP majority.
Intra-GOP negotiations: Factions within the Republican conference remain divided—some want deeper spending cuts, others (especially from swing or rural states) resist harsh Medicaid/SNAP reductions. SALT cap bracket, Medicaid work rules, green-energy incentive rollbacks, and public-lands provisions are key sticking points.
Final House vote on Senate amendments: After Senate approval, the amended bill returns to the House. If enough changes have been made, it’ll need another House vote before heading to the President.
Debt-ceiling packaging: The bill also includes a $5 trillion debt-ceiling increase—critical to avoid a U.S. default by August, adding urgency to the timeline.

Timeline at a Glance

What Taxpayers Should Track

Senate final text: Stay updated on Senate changes—especially to SALT limits, child/SNAP/Medicaid rules, and which deductions remain.
Byrd Rule decisions: Watch for new provision removals by the parliamentarian—those could reshape both tax and spending elements.
Vote margins: A 53–47 majority means the bill can only lose 3 GOP votes (assuming no defections).
Impact on social programs: Monitor modifications to Medicaid and SNAP: more restrictive work requirements or eligibility cuts directly affect low-income families.
Final SALT cap rules: The current House version raised the cap to $40K; the Senate may reduce it. This especially matters for taxpayers in high-tax states.
Debt-ceiling tied consequences: If tied to the debt limit, holdups could risk a government shutdown or ratings downgrades—watch Treasury warnings closely.

What You Can Do Now

Use credible calculators/tools: Multiple outlets offer simulations projecting your tax change based on your income, SALT deductions, and family size. See the sidebar.
Review household finances: If your income includes tips, overtime, or small business pass-through income, check how these provisions might benefit you.
Plan if you rely on income support: If you're on SNAP, Medicaid, or ACA subsidies, follow changes to eligibility/work-requirements—transitions may be swift.
Stay alert to refinements: Even after Senate approval, House reconsideration or last-minute Senate procedural votes (motion to proceed, cloture) may shape the final text.
Advocate or get involved: Stakeholders—especially in vulnerable communities—may be able to voice concerns during this negotiation window.

Bottom Line

The Big Beautiful Bill delivers major tax relief, especially for families, seniors, tipped/overtime workers, and small businesses. But it's paid for by deep cuts to social safety net programs, massive increases in federal debt, and benefits that skew toward higher-income households. It's a high-stakes gamble: some win more take-home money now, but millions may lose crucial support.

We will keep you updated as we learn more about this tax bill and its impact on taxpayers and business owners.

How the New Tax Bill Could Affect You, Your Business, and Your Benefits