House Passes “One Big Beautiful Bill”: Key Tax Changes and Implications

In a closely contested vote, the U.S. House of Representatives approved the "One Big Beautiful Bill" on May 22, 2025, with a 215–214 margin. This comprehensive tax and spending package, central to President Donald Trump's agenda, now advances to the Senate for consideration.

Overview of the Legislation

The bill introduces significant tax reforms and spending adjustments:

• Tax Cuts: Extends individual and corporate tax cuts from the 2017 Tax Cuts and Jobs Act.

• Tip and Overtime Income: Exempts tips and overtime pay from federal income tax.

• Child Tax Credit: Increases the credit to $2,500 per child through 2028.

• SALT Deduction Cap: Raises the state and local tax deduction cap to $40,000 for households earning under $500,000, with a phase-down for higher earners.

• MAGA Savings Accounts: Introduces $1,000 "Money Accounts for Growth and Investment" for children born between 2024 and 2028.

• Medicaid and SNAP: Imposes stricter work requirements and reduces funding for these programs.

• Defense and Border Security: Allocates $150 billion to defense and $70 billion to border security initiatives.

  
  

Fiscal Impact

The Congressional Budget Office estimates the bill will add approximately $3.8 trillion to the federal deficit over the next decade. Critics express concerns about the long-term fiscal sustainability, while proponents argue the tax cuts will stimulate economic growth.

Next Steps

The bill proceeds to the Senate, where it may face amendments and further debate. Tax professionals and business owners should monitor developments closely, as changes could impact tax planning and compliance strategies.

Bizora AI will continue to provide updates on this significant legislation and its implications for taxpayers and businesses.