Tax provisions in the One Big Beautiful Bill Act: What's permanent vs temporary
The "One Big Beautiful Bill Act" extends and modifies numerous provisions from the 2017 Tax Cuts and Jobs Act while introducing entirely new deductions and benefits. Understanding which changes are permanent versus temporary is crucial.
The distinction between permanent and temporary provisions will significantly impact how Americans approach tax planning, retirement savings, and major financial decisions in the coming years.
Permanent provisions
These long-haul changes lock in lower taxes and higher thresholds, giving you a predictable baseline for long-range financial planning.
Core TCJA extensions
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Lower individual income tax rates and thresholds from TCJA
- Higher Alternative Minimum Tax (AMT) exemption amounts and thresholds
- $750,000 limitation on mortgage interest deduction
- Standard deduction increases, with annual inflation adjustments
Estate and gift tax
Starting in 2026, the lifetime estate tax exclusion amount will permanently increase to $15 million per individual and will be adjusted annually for inflation
Child tax credit
The maximum child tax credit is raised to $2,200 per qualifying child and will not be adjusted for inflation
Moving expenses
The Act permanently removes both the exclusion for qualified moving expenses reimbursement and the deduction for moving expenses, except for active-duty members of the Armed Forces and members of the U.S. Intelligence Community.
Tax breaks you don’t want to miss
From boosted deductions to targeted credits, these limited-time provisions starting in 2025 could significantly reduce your tax bill – if you act before they expire.
Temporary provisions (2025–2028)
- Senior bonus deduction: Additional standard deduction for taxpayers over 65 from 2025 through 2028, equal to $4,000 per individual
- New income deductions: Federal income tax deduction for both qualified overtime and qualified tips, effective for tax years 2025 through 2028
- Auto loan interest deduction from 2025 through 2028, limited to $10,000 overall for US-assembled vehicles.
Temporary provisions (2025–2029)
The SALT Deduction Enhancement raises the federal cap on state and local tax deductions from $10,000 to $40,000 beginning in tax year 2025, with annual inflation adjustments through 2029. Unless extended by Congress, the cap will return to $10,000 in 2030.
Temporary provisions (other timeframes)
Renewable Energy: Solar and wind projects have a placed-in-service deadline of December 31, 2027, but only for projects that don't begin construction before July 4, 2026.
What this tax overhaul means for you – now and next
The new legislation represents one of the most significant tax reforms in recent history, providing both immediate relief and long-term certainty for millions of Americans. While the permanent extensions of the 2017 tax cuts offer stability for individual and business planning, the temporary nature of many new provisions – particularly those benefiting seniors, tipped workers, and overtime earners – means taxpayers should remain vigilant about potential changes after 2028.
As these changes take effect throughout 2025 and beyond, all taxpayers are advised to work closely with tax professionals to optimize their strategies and take full advantage of both the permanent structural changes and the limited-time opportunities provided by this landmark legislation.
The full impact of this comprehensive reform will unfold over the coming years, making it essential for individuals and businesses to stay informed about implementation details and potential future modifications.
Need expert assistance? Contact Taxes for Expats
Understanding how to apply the permanent and temporary tax provisions in the One Big Beautiful Bill requires deep knowledge of IRS rules and a forward-looking strategy.
At Taxes for Expats, our CPAs specialize in optimizing outcomes for Americans worldwide – ensuring you capture every available deduction before it expires. Book a free consultation call with us today, and let us guide you through.
Let TFX optimize your 2025 return
FAQ
Key permanent provisions include lower individual tax rates, higher AMT exemptions, and a $15 million estate tax exclusion starting in 2026.
Most temporary provisions begin in 2025 and expire by 2028 or 2029, with the SALT cap reverting to $10,000 in 2030 unless renewed by Congress.
Yes – expats can qualify for several deductions, but understanding timing is essential to maximize both permanent and time-limited tax breaks.
