The 'Big Bill' Is in Motion — Here’s What You Can Do Now

As the One Big Beautiful Bill Act (OBBBA) advances through Congress, with a Senate vote expected soon and potential enactment in July, it’s time to think strategically about your tax position.

This legislation proposes to extend certain tax benefits — like the 20% pass-through deduction and bonus depreciation — while also introducing changes that could affect clean energy credits and international tax rules. These developments present both opportunities and challenges for individuals, businesses, and nonprofits.

Here’s how you can prepare and plan ahead.

• Tax opportunities to consider now
• Legislative status and process
• Potential tax changes in the proposed bill

Tax opportunities to consider now

1. Plan ahead for clean energy credit changes

With over a dozen Inflation Reduction Act-related credits scheduled for accelerated phaseouts, timing plays a critical role. Key planning steps include:

• Reviewing applicable sunset dates for relevant credits
• Assessing the strategic timing for renewable energy project construction
• Intentionally plan tax credit purchases and sales to manage cash flow and tax liabilities

2. Evaluate cost segregation scenarios

Cost segregation studies remain a powerful tool, even in the 40% environment under current law. If the proposed 100% bonus depreciation revival passes, the potential benefits could increase. Consider:

• Launching or accelerating cost segregation projects
• Modeling scenarios to assess the impact on your 2025 estimated tax payments

3. Analyze impacts of proposed tax changes

Several proposed provisions in the OBBBA could retroactively affect your 2025 tax position. Scenario modeling can help evaluate how changes to bonus depreciation, business interest expense, and R&D deductions could affect you.

4. Exempt entities: Prepare for potential changes

Nonprofits with employees receiving compensation in excess of a $1 million should be prepared to pay the 21% executive compensation excise tax. This tax is paid by the nonprofit organization and not the employee. It may also apply to certain employee severance agreements.

Colleges and universities can plan for major changes to the endowment excise tax which has been expanded under the proposals.

5. Assess international tax exposure

Foreign-owned U.S. businesses could see increased tax liabilities under proposed changes to Section 899. Planning considerations include:

• Analysis of intercompany cross-border cash flows
• Estimating potential increases in federal income and withholding taxes
• Reviewing transfer pricing and capital structure strategies

Legislative status and process

On May 22, the House passed the OBBBA by a mostly party-line vote of 215 to 214 (with one person voting “present”). The Senate Finance Committee released its initial version of the bill on June 16, 2025.

What is the process for turning the tax bill into law?

Now that the House has passed the tax bill, there are several legislative steps that follow:

• Once the Senate passes its own version of the budget reconciliation package, the package will head back to the House for a vote, or the differences will need to be reconciled. Congress sends the bill to President Donald Trump for signature.

Potential tax changes in the proposed bill

Some key tax highlights in the legislative proposals, in addition to the TCJA extensions and Trump’s campaign promises, include:

1. Extending current tax rates: The current income tax rates and brackets for individuals, estates, and trusts would continue (adjusted for inflation).

2. Bigger tax break for owners of pass-through businesses: The tax deduction for owners of qualified pass-through businesses would increase from 20% to 23%, starting with the 2026 tax year. This effectively reduces the top rate on qualified business income (QBI) from 29.6% to 28.49%.

Senate proposal: Keeps the rate at 20%, maintaining the top 29.6% tax rate on qualified business income.

3. Higher limit for state and local tax (SALT) deductions for individuals, estates, and trusts: The SALT cap was raised to $40,000 ($20,000 for married filing separately) for filers with modified adjusted gross income (AGI) up to $500,000 ($250,000 for married filing separately) before phasing down. Both the SALT cap and the modified AGI levels would increase by 1% annually through 2033. Taxpayers in the 37% tax bracket may have their SALT deduction further limited by the Pease limitation.

Senate proposal: The Senate Finance Committee punted on the contentious SALT issue, extending the current $10,000 ($5,000 for married filing separately) limitation but indicating that “the amount of the individual SALT cap is the subject of continuing negotiations” leaving the door open for changes.

4. SALT cap workarounds curbed: The deduction for state income taxes paid by pass-through entities (i.e., PTET taxes) would be limited with exceptions for qualified trades or businesses (starting with the 2026 tax year).

Senate proposal: ALL PTET deductions (including qualified trades or businesses) are capped at the owner level at the greater of $40,000 or 50% of the PTET deduction, starting with the 2026 tax year.

5. Larger estate and gift tax exemption: The amount you can give away during your lifetime without paying estate or gift taxes would increase to $15 million, adjusted for inflation, starting from the 2026 tax year.

6. Changes to tax credits: Various tax credits under the IRA would be significantly changed and phased out.

7. Enhanced expensing of certain property: Businesses can fully deduct the cost of certain property and equipment with enhanced bonus depreciation starting January 19, 2025, and increased Section 179 expensing starting January 1, 2025.

8. Restoration of full deduction for research and development costs: Beginning in 2025, companies could fully deduct their domestic research and development expenses. Previously capitalized costs incurred in prior years would still be required to be amortized.

Senate proposal: Previously capitalized domestic R&D costs can be deducted in 2025, with even more favorable options for certain small business taxpayers.

9. Increased business interest deduction: Beginning in 2025, businesses may be able to deduct more interest expense due to the reinstatement of the depreciation and amortization addback when computing the Section 163(j) business interest limitation.

10. Changes to the employee retention credit (ERC): The period for the IRS to challenge an ERC claim would be extended to at least six years from the date the claim is filed. The IRS would stop processing refunds for Employee Retention Credit claims filed after January 31, 2024. The House subsequently passed a resolution removing this provision from the bill, likely concerned about procedural issues it could encounter in the Senate.

Senate proposal: Includes similar provisions as in the original House bill but targets only refund claims for the third and fourth quarter of 2021.

11. Renewed opportunity zone program: The program that encourages investment in economically distressed areas would be renewed and modified.

12. Expanded access to simpler accounting methods for manufacturers: Currently, small manufacturing businesses can use simpler accounting methods and have fewer tax restrictions. The threshold on eligibility to qualify for this flexibility would rise from $31 million to $80 million in average annual gross receipts beginning in 2026.

Senate proposal: This provision is NOT included in the Senate proposal.

13. End of de minimis tariff exemption: Eliminates de minimis exemption (currently $800) to U.S. tariffs on imports.

Senate proposal: This provision is NOT included in the Senate proposal.

How CLA can help with potential tax law changes

Whether you’re a business owner, nonprofit leader, health care administrator, or international investor, we work with you to develop a strategy aligned with your goals. With customized tax strategies and comprehensive analysis on tax policy, CLA’s tax team can help you navigate tax planning and make informed decisions this year and beyond.

• Stay informed — Visit our Tax Policy Watch page for updated insights on various aspects of the House tax bill to give you a more in-depth look at changes that may impact your families and businesses.
• Stay connected — Subscribe to our tax policy newsletter to stay up to date and prepared regardless of where trade and tax policy lands.

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