The recently passed One Big Beautiful Bill (OBBB) Act marks one of the most significant tax overhauls since the 2017 Tax Cuts and Jobs Act (TCJA). Designed to extend and expand many of the TCJA’s provisions, the OBBB Act introduces a range of changes that will impact individuals, businesses, and specific industries starting in 2026. Here’s a high-level overview of what our clients need to know.
Extension of Key TCJA Provisions
The OBBB Act extends several popular provisions from the TCJA that were set to expire after 2025, including:
- Higher standard deduction levels
- Modified individual tax brackets with lower rates
- Expanded child tax credit
- Repeal of personal exemptions remains in place
These extensions aim to provide continued tax relief for middle-income households and simplify filing for many taxpayers.
Business Tax Changes
Businesses will see a mix of extensions and new incentives:
- 100% bonus depreciation is reinstated for property acquired and placed in service after January 19, 2025 and is permanent going forward
- Section 199A deduction for pass-through entities is extended
- R&D expensing rules are modified to allow immediate deduction of domestic research costs. In addition, the bill provides small businesses with the option to apply this change retroactively back to 2022 through amended returns.
- Section 179 expensing increased to a maximum of $2,500,000 and phaseout threshold is increased to $4,000,000
- Corporate tax rate remains at 21%
What’s Next?
We’ll be publishing a series of follow-up blog posts that take a deeper dive into these areas, including further detail on the Act’s implications for international tax, real estate (including changes to Opportunity Zone (OZ) funds), and tax-exempt entities. Stay tuned for insights on how these changes may affect your personal or business tax planning.
In the meantime, if you have questions or would like to discuss how the OBBB Act may impact your specific situation, please don’t hesitate to reach out to our Tax Practice Leader Brigitte Sutherland or your Perkins advisor.