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Update: On May 22, 2025, the House passed the bill with a vote of 215-214. The bill will now go to the Senate.

On May 12, 2025, the House Ways and Means published tax provisions found in The One, Big, Beautiful Bill. The bill includes no taxes on tips and overtime pay, plus new tax breaks for car buyers and seniors.

Among the proposed tax provisions, we think the following would be of interest to you:

Individual tax rates

  • The bill would permanently extend the 37% top rate for individuals that was set in the 2017 tax law. House Speaker Mike Johnson said a 39.6% rate is being considered for individuals making more than $2.5 million.

Exemption for tipped wages and overtime pay

  • No taxes would be due on tipped wages and overtime pay.
  • The bill provides exacting definitions of both types of wages exempt from tax.

Interest on automobile loans

  • Individuals would be allowed to write off the interest on loans for American-made vehicles.

  • The above-the-line deduction, meaning it is deductible in arriving at adjusted gross income, would be capped at $10,000. The deduction would phase out for taxpayers making more than $100,000, or $200,000 for those filing joint returns.

Extension and increase in deduction for qualified business income

  • The current deduction would increase from 20% to 23%.

Temporary restoration of business tax breaks

  • Allow companies to deduct full costs for the purchase of certain business property,
  • Deduct domestic research and development expenses, and
  • Allow companies to include amortization and depreciation when calculating a limit on business interest deductions.
    • All three provisions would apply at the beginning of 2025 and extend through at least 2029.

Increase to State and Local Tax (SALT) deduction

  • The cap on the state and local tax deduction would be increased to $30,000.
  • Taxpayers making more than $400,000 would face a lower cap. Married couples filing separately would be limited to a $15,000 deduction each and a $200,000 income test.
    • The SALT increase will likely see pushback on the House floor. Five Republicans from New York and California last week rejected that proposed increase as insufficient.

Increase to standard deduction for seniors

  • The bill provides a $4,000 bonus for seniors on top of the regular standard deduction.

Estate exemption increase

  • The bill also raises the estate tax exemption to $15 million.

Private foundations tax rates set to increase

  • The bill would impose a new tax on private foundations of up to 10%.