What’s in “the one, big beautiful bill”? A first look at the House’s sweeping tax proposal 

UPDATE: The House passed this bill with a 215-214 vote in the early morning on May 22. This legislation now moves to the Senate, where it’s expected to be debated and revised through June. The version of the bill that just passed includes several amendments needed to secure enough votes. These changes included a modification to the proposed increase in the expiring SALT deduction cap, an accelerated timeline for phasing out certain energy provisions and implementation of new work requirements for Medicaid eligibility. The updated bill also removed a controversial provision that would have granted the Treasury Secretary expanded authority to revoke the tax-exempt status of organizations deemed Terrorist Supporting Organizations.

In previous articles, we’ve walked through how Congress can use special budget reconciliation rules to pass tax legislation. On April 10, 2025, the House took a big step forward by approving the budget resolution — just days after the Senate passed this resolution. That completed the first lap around the Capitol. 

Now, the action has shifted to the second lap: turning the broad budget blueprint into detailed legislation. Eleven House committees were tasked with shaping their pieces of this massive package. Among them, the House Ways and Means Committee played a particularly critical role for taxpayers.  

On May 14, 2025, the House Ways and Means Committee passed its section of the bill — covering comprehensive tax provisions — on a party-line vote. Following this step, the House Budget Committee is  assembling the broader legislation, commonly referred to as the “one, big beautiful bill.”  

However, on May 16, the Budget Committee voted against advancing the bill, with several members requesting additional spending cuts before proceeding. Over the weekend, congressional leaders and committee members worked to a compromise.  

On Sunday night, May 18, the Budget Committee approved the bill in a narrow 17-16 vote, allowing it to move forward to the House floor. A vote is expected during the week of May 19, although change may still be made through a manager’s amendment in the House Rules Committee prior to the floor vote. 

Overview of tax bill  

The Ways and Means Committee revealed its long-anticipated tax proposal in stages on May 9 and 12. The full package clocks in at nearly 400 pages. The Joint Committee on Taxation (JCT) released a companion document — JCT Description of the Bill — that breaks it down in a far more digestible format by summarizing the current law, proposed changes, effective dates and even includes examples.   

Important caveat: this bill is not final. There’s still room for revisions and final passage by Congress is far from guaranteed. There’s plenty of legislative work (and political drama) still ahead. But after months of speculation, it’s helpful to finally see what congressional leaders have put on the table, and what topics they’ve chosen to exclude from the bill. Notably absent from the bill are proposals to close the carried interest loophole, adjust the corporate income tax rate and raise the highest marginal tax bracket for ultra-high income individual taxpayers. 

We should also note that this expansive bill also includes an increase to the federal government debt limit. It is projected by Treasury Secretary Bessent that we will hit the debt limit by mid-July and the U.S. would default on obligations if an increase were not passed. This adds additional pressure to Congress to pass this bill or separate the increase to the debt limit into a separate bill. 

TCJA provisions  

A major focus of the bill is extending — and in many cases making permanent — key provisions from the 2017 Tax Cuts and Jobs Act (TCJA), many of which were set to sunset or expire at the end of the year. Without action, individual taxpayers across all tax brackets faced tax hikes in 2026. This proposal aims to prevent that. 

Here’s a quick rundown of TCJA-related measures included in the bill: 

• Individual tax brackets would be extended and made “permanent” (meaning no scheduled expiration, though a future Congress could always change them). 

• Standard deduction would remain permanently higher as established by TCJA. 

• Child Tax Credit would stay at $2,000 permanently — with a temporary bump to $2,500 per child from 2025-2028. 

• 20% Qualified Business Income (QBI) Deduction for certain pass-throughs would be made permanent and the deduction would increase to 23% in 2026. 

• Alternative Minimum Tax (AMT) relief would also be made permanent. 

• Estate and Gift Tax Exemption would continue, increasing to $15 million in 2026 and indexed for inflation going forward.  

• TCJA limits on certain itemized deductions would remain in place permanently (details are in the JCT Description).   

• SALT Limit. One of the most hotly debated elements of the TCJA has been the $10,000 cap on state and local tax (SALT) deductions. The new proposal would raise that cap to $30,000 — a welcome change for many taxpayers in high-tax states. The bill also tweaks the pass-through entity (PTE) election workaround that some states have used to sidestep the cap, disallowing the deduction for pass-through entities that are service businesses or managing investments. That said, SALT remains a sticking point in negotiations, and the final version of this provision may still change before the full House vote.  

Campaign-themed proposals  

The bill also delivers some of the campaign promises touted during last year’s election season. These proposals include:  

• No tax on tips subject to limitations based on the taxpayer occupation and individual taxpayer’s income. 

• No tax on overtime pay subject to limitations based on taxpayer income. 

• No tax on social security benefits. While benefits wouldn’t be fully excluded from tax, the bill does provide seniors with an increased standard deduction.  

• Tax incentive for American-made cars. Buyers could deduct up to $10,000 in interest on loans for domestically produced vehicles.  

• Universal children’s savings accounts. Dubbed “MAGA” (Money Account for Growth and Advancement), these accounts would help kids save for college and future expenses.  

• Immediate expensing for U.S. manufacturing facilities. The bill introduces a new category for “Qualified Production Property,” (QPP), aimed at incentivizing domestic manufacturing.  Nonresidential real estate used in qualifying manufacturing activities — which would typically depreciate over 39 years — could instead be 100% deductible in the year placed in service.  This would apply to converted or newly constructed production property. 

Restoring business provisions 

Several pro-business measures from the TCJA started to phase out or scale back after 2022. The proposed bill would bring them back:  

• Research expenditures: 100% expensing would return in 2025 (with amortization still an option).  

• 100% bonus depreciation: Restored to 100%, retroactive to assets placed in service after January 19, 2025. 

• Interest expense limitation: Businesses could once again add back depreciation and amortization to the formula used to arrive at Adjusted Taxable Income (ATI) when calculating interest deductibility.  

• Section 179 expensing: The limit for immediate expensing of certain business property would jump to $2.5 million in 2025, with the phase-out beginning at $4 million. This effectively doubles the current cap and gives small and mid-sized businesses more room to invest.   

• Opportunity Zones (OZ): Originally introduced in the TCJA, OZ would get a major update under the proposed bill. While full details are in the JCT description, the changes aim to refine and expand the program’s impact, especially around transparency and qualifying investments.  

Scaling back IRA energy incentives 

The bill also walks back several energy tax breaks introduced under the Inflation Reduction Act of 2022 (IRA). These changes affect both individuals and businesses and are detailed in the JCT Description.  

New provisions for tax-exempt entities  

The bill proposes additional income and excise taxes on private foundations and private colleges and universities.  Another provision that has drawn attention expands the power of the Treasury Secretary to rescind their charitable status if they are deemed a Terrorist Supporting Organization (TSO). 

Cracking down on fraud and abuse  

A final focus on the bill is enforcement. One major area: the Employee Retention Credit (ERC). This program has seen no shortage of attention and controversy over the past five years. The bill would introduce tougher penalties for ERC promoters and give the IRS more time to audit past claims by extending the statute of limitations.  

While this legislation is still working its way through the House, it provides visibility into Congress’ tax priorities — from extending TCJA provisions to rolling out new incentives and tightening enforcement. Upon House passage,  Senate will convene to offer its ideas on the bill, and any differences would need to be ironed out later with the House. Members of the Senate are indicating they will make material modifications to the bill including making more business provisions permanent, providing business owners more certainty on tax policy. So, there’s a long road ahead before any of it becomes law, and plenty of room for changes along the way. 

As always, we’re keeping a close eye on developments and what they could mean for you. If you have questions about how these proposals might impact your tax situation — or just want help preparing for what’s next — please contact your Sikich advisor. We’re here to help you navigate the complexities and stay two steps ahead. 

About Our Authors

Tom Bayer, CPA, CExP, has specialized expertise in the areas of business succession planning, tax planning and compliance, and business advisory. He has deep experience providing a range of accounting, tax, and business advisory services to commercial clients across industries.

Jim Brandenburg, CPA, MST, possesses extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions, and tax legislation. His expertise includes working with owners of closely held businesses to identify tax planning opportunities and assist them in implementing these strategies.

Mark Puliti CPA, MST, is a tax professional with more than ten years of experience assisting small and mid-sized business owners achieve their non-tax objectives in a tax efficient manner.