Congress Extends 2017 Tax Cuts with New Legislation

By Jake Taylor

Congress has passed H.R.1 — widely referred to as the “Big Beautiful Bill” — which extends many of the tax cuts first enacted under the 2017 Tax Cuts and Jobs Act (TCJA). Signed into law by President Trump on July 4, 2025, this legislation is designed to provide long-term tax certainty for both individuals and businesses by making key TCJA provisions permanent, while also introducing a few new measures that take effect starting in the 2025 tax year.

Impact on Businesses

Businesses will see a continuation of the 20% Qualified Business Income (QBI) deduction for pass-through entities, which has been made permanent under H.R.1. Bonus depreciation — allowing companies to immediately write off the cost of qualified equipment — has also been extended indefinitely for property placed in service after January 19, 2025, giving businesses more flexibility when investing in new assets. The Section 179 expensing limit is raised to $2.5 million, with a higher phase-out threshold, and research and development costs can once again be fully deducted in the year they are incurred.

For Individual Taxpayers

For individual taxpayers, the bill permanently locks in the TCJA’s lower income tax brackets, which range from 10% to 37%. The standard deduction remains elevated and will continue to be indexed for inflation, with amounts set at approximately $15,750 for single filers, $23,625 for head of household, and $31,500 for joint filers in 2025. The popular child tax credit is also slightly increased to $2,200 per qualifying child, with a portion now refundable up to $1,700 (indexed for inflation), and income thresholds unchanged at $200,000 for single filers and $400,000 for married couples. The "Other Dependent Credit" has also been made permanent. A new, temporary annual deduction of $6,000 (from 2025 through 2028) is also available for taxpayers aged 65 or older, subject to income phase-outs.

Homeowners and State & Local Taxes (SALT)

The $10,000 SALT deduction cap, first implemented under the TCJA, is temporarily increased to roughly $40,000 for joint filers (with a tiered amount for single filers) from 2025 through 2029. This increased cap is subject to a phase-down for Modified Adjusted Gross Income (MAGI) above $500,000 for joint filers (and $250,000 for married filing separately) before reverting back to the $10,000 limit in 2030. The mortgage interest deduction cap of $750,000 in new home debt is now permanently set, providing clarity for homebuyers and real estate investors. Additionally, mortgage insurance premiums (PMI) associated with acquisition debt may now be treated as deductible mortgage interest.

New Deductions for Workers

In addition to extending existing provisions, H.R.1 introduces new deductions aimed at workers, effective for tax years 2025 through 2028. For a limited time, taxpayers can claim above-the-line deductions for certain types of income, such as up to $25,000 in qualified tip income and up to $12,500 ($25,000 for joint filers) in qualified overtime pay. The bill also creates a temporary deduction for interest paid on passenger vehicle loans, adding new opportunities for middle-income households to reduce their taxable income.

Looking Ahead

For business owners and individuals alike, the “Big Beautiful Bill” is a significant extension of policies that were set to expire under the original TCJA framework. While some provisions are temporary and will require future congressional action, the majority of changes are now permanent, offering greater stability for tax planning in the years ahead. The Chamber encourages all of our members to consult with a qualified tax professional to understand how these changes specifically impact their financial situation.