Summary of Key Provisions in the Proposed “Big Beautiful” Tax Bill

In May 2025, the House Ways & Means Committee released an initial draft of the “Big Beautiful” tax bill, aiming to extend and make permanent many of the tax cuts originally enacted in 2017 under the Tax Cuts and Jobs Act (TCJA). While the bill is still in draft form and has not been officially enacted, it outlines several significant tax changes that could affect millions of taxpayers if adopted.

Key Highlights Include:

  • Standard Deduction Increase: Under current law, the increased standard deduction is set to expire after December 31, 2025. The bill proposes permanently extending the doubled standard deduction from the TCJA, with additional inflation adjustments and extra increases of $1,000 for singles, $1,500 for head of household, and $2,000 for married couples from 2025 through 2028. This change would lower taxable income for many filers.
  • Personal Exemptions: The bill would permanently repeal personal exemptions, which were scheduled to return after 2025 under current law.
    What is a Personal Exemption?
    A personal exemption was a fixed dollar amount taxpayers could deduct from their income for themselves, their spouse, and each dependent, thereby reducing taxable income. For example, in 2017, the exemption amount was $4,050 per person. The exemption was intended to shield a basic subsistence level of income from taxation and to link tax liability to family size. However, the Tax Cuts and Jobs Act eliminated personal exemptions from 2018 through 2025, replacing them with a higher standard deduction and expanded child tax credits.
  • Additional Standard Deduction for Seniors: This provision provides a deduction for seniors (age 65 or older) of $4,000 per eligible filer with a modified adjusted gross income that does not exceed $75,000 for single filers ($150,000 for married filing jointly). The deduction is allowed for tax years 2025 through 2028.
  • State and Local Tax (SALT) Deduction Cap: While the initial draft did not change the $10,000 SALT deduction cap, there is ongoing discussion about raising it to $30,000 for certain taxpayers.
  • Child Tax Credit (CTC): The maximum Child Tax Credit is increased to $2,500 through 2028 and indexed for inflation thereafter U.S. citizen children living abroad remain eligible for this credit if expat parents file U.S. tax returns, offering similar benefits as for domestic filers.
  • Estate and Gift Tax Exclusion: The exemption amounts would remain elevated at $15 million for individuals and $30 million for married couples, indexed for inflation, benefiting those with large estates.
  • Section 899 – Tax on Residents of “Discriminatory Foreign Countries: A new tax regime imposes an additional 5% annual tax increase up to 20% on certain foreign residents from countries deemed to impose unfair foreign taxes. This could significantly raise U.S. tax liabilities and withholding rates for affected expats and entities

Reference: https://waysandmeans.house.gov/wp-content/uploads/2025/05/The-One-Big-Beautiful-Bill-Section-by-Section.pdf

Disclaimer:
This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors or consult us regarding your own personal tax situation as this article was intended to be general in nature.

This bill remains a proposal and has not been officially announced, passed by Congress, or signed into law. Provisions are subject to change as the legislative process unfolds, and taxpayers should not rely on these potential changes until they become law.