The 28-page draft bill originally released by the House Ways and Means committee has been expanded to a 389-page version officially titled The One, Big, Beautiful Bill. This expanded version makes changes to some of the provisions we originally announced, including:
- Increasing the IRC §199A deduction from 20% to 23% (previous version was 22%);
- A modified $30,000 cap on state and local tax deductions ($15,000 for married filing separately), with a phasedown for higher-income taxpayers (over $400,000/$200,000);
- Extending 100% bonus depreciation for qualifying property acquired January 20, 2025, through December 31, 2029;
- Reinstating immediate expensing of domestic research and experimental expenditures for tax years 2025 through 2029; and
- Reinstating a modified version of the overall limitation on itemized deductions.
This draft also introduces some new provisions, which include:
- Terminating all three clean vehicle credits (two in 2026 and one in 2027);
- Creating new “Money Account for Growth and Advancement” (MAGA) accounts, which are tax-advantaged savings accounts for children under age 8;
- New above-the-line deductions for qualified tips, qualified overtime compensation, and interest on passenger vehicle loans, through 2028;
- Reinstating the above-the-line deduction for cash charitable contributions ($150 for single filers and $300 for joint);
- Additional standard deductions of up to $4,000 for aged and/or blind with an AGI phaseout on this addition; and
- Increasing the 1099-K threshold to $20,000 and greater than 200 transactions, and the 1099-NEC/1099-MISC filing requirement from $600 to $2,000.
There is still no mention of an increased exclusion or deduction for Social Security benefits, though many of these new provisions will only apply to taxpayers with a valid Social Security number.
This is still not a final bill, and we will continue to keep you updated as news develops on these provisions.
The full draft bill is available at:
www.caltax.com/files/2025/taxbilldraft2.pdf
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