The One Big, Beautiful Bill: What the 2025 Tax Reform Means for Businesses, Employees, and Investors
Overview of the 2025 Tax Reform
The U.S. House of Representatives has passed the “One Big, Beautiful Bill”, a sweeping 2025 tax reform package that redefines the U.S. tax landscape. From new business deductions to expanded health savings account (HSA) eligibility and revised international tax enforcement, this bill has major implications for businesses, employees, and investors.
International Tax Policy Updates
TCJA Provisions Made Permanent: The bill locks in lower international tax rates: GILTI (10.5%), FDII (13.125%), and BEAT (10%).
New Section 899: Penalties for Discriminatory Foreign TaxesImposes escalating taxes on foreign entities from “discriminatory countries,” aligning with U.S. efforts to resist the OECD global minimum tax.
Estate & Gift Tax Changes
$15M Unified Credit Exemption Made Permanent
The estate, gift, and GST tax exemption increases to $15 million per individual, indexed for inflation. This encourages long-term estate planning and wealth transfer.
Business Tax Reform Highlights
R&D Expense Deduction Flexibility
Taxpayers can now choose how to deduct domestic research and development expenses, with expanded credits for software and engineering work. Startups benefit from refundable R&D credits—even without taxable income.Bonus Depreciation & Section 179 Expansion
Reinstates 100% bonus depreciation through 2030 and increases the Section 179 deduction limit to $2.5 million, supporting capital investment in equipment and property.199A QBI Deduction Boost
The Qualified Business Income deduction is made permanent and increased to 23%, with clarified income eligibility rules.
More Generous Business Interest Deductions
Changes to adjusted taxable income (ATI) calculations allow for greater interest expense deductions by excluding depreciation and amortization.Excess Business Losses Made Permanent
Codifies the excess business loss limitation, now with broader applicability and indexed thresholds.Qualified Opportunity Zones (QOZ) Revamped
A new QOZ program begins in 2027, emphasizing rural investment, with new compliance and reporting mandates.Expanded Low-Income Housing Tax Credits
The bill increases credit allocations through 2029 and enhances access for rural and Indian areas.Rural Loan Interest Exemption
Banks may exclude 25% of interest income on agricultural or aquaculture real estate loans from taxable income.
Employee Benefits & ACA Changes
HSA Expansion
Health Savings Accounts (HSAs) see broadened eligibility, including Medicare recipients and FSA spouses. Contribution limits double for individuals earning under $75,000.Employee Retention Credit (ERC) Restrictions
ERC claims filed after January 31, 2024 are denied. Statute of limitations for audits is extended to 6 years.ACA Exchange Updates
ACA marketplaces must verify 75% of new enrollees and conduct shorter open enrollment periods. Employers may see higher plan participation.DACA Exclusion from ACA
DACA recipients lose eligibility for ACA coverage and subsidies, potentially shifting coverage burdens to employers.
Conclusion: What Comes Next?
The Senate will now review the bill. If passed, the One Big, Beautiful Bill will reshape tax policy for the next decade. Businesses, estate planners, and benefits administrators should prepare now.
For customized tax advice, contact Christine Alexis Concepción at caconcepcion@concepcionlaw.com
