One, Big Beautiful Bill
Written by Larry Hall
May 31, 2025
The "One Big Beautiful Bill" is making waves with its potential tax reforms, aiming to make the 2017 tax cuts permanent while introducing new deductions and exemptions. The bill is moving swiftly through Congress, with major implications for taxpayers.
Current Status of the Bill
The bill has passed through key House committees and is heading for a final vote in the House of Representatives. If approved, it will move to the Senate for further deliberation. The White House set a July 4 deadline for passage, adding urgency to the debate.
While the bill enjoys strong Republican support, it faces expected Democratic opposition, with concerns about its impact on the federal deficit and proposed spending cuts to Medicaid and SNAP.
Key Tax Provisions in the Bill
Permanent Extension of 2017 Tax Cuts
The bill seeks to extend individual tax rate reductions enacted in 2017 beyond their scheduled expiration in 2025.
$4,000 Deduction for Seniors
This new deduction provides tax relief for older Americans: ✔ Available to filers 65 and older ✔ Applies to tax years 2025 through 2028 ✔ Income limit: $75,000 for individuals, $150,000 for joint filers ✔ Can be claimed whether seniors itemize or take the standard deduction
While eliminating taxes on Social Security was initially proposed, it was not included in the final bill. This deduction serves as an alternative form of tax relief for retirees.
No Taxes on Tips
Service industry workers would no longer be taxed on earned tips, a move designed to boost take-home pay and support lower-income workers.
Social Security Taxes Remain
Despite earlier promises to eliminate taxes on Social Security benefits, this provision did not make it into the final bill. Instead, a separate bill, the Senior Citizens Tax Elimination Act, has been introduced to fully repeal Social Security taxes, though concerns remain about its impact on Social Security funding.
Spending Cuts to Offset Tax Reductions
To balance the budget impact, the bill includes reductions in Medicaid and SNAP benefits, drawing criticism from opponents who warn that the cuts could widen economic inequality.
What This Means for Taxpayers
Nothing in this bill affects taxpayers until it becomes law. The bill’s spending cuts and deficit concerns could lead to Senate revisions, which may alter its final form.
For now, taxpayers should stay informed and proactive, especially seniors who may benefit from the new $4,000 deduction.
If you’re wondering how all this may affect you, I'm Larry Hall with HallTaxPro.com. Visit my website at www.HallTaxPro.com, if you’d like to discuss what this means for your personal tax situation.
Source: Tax Foundation – Read the full analysis here
This article is for informational purposes only and should not be considered professional tax advice. For guidance on your specific tax situation, consult a tax professional.
